do you think its ok the way i solve this ariel groupe case?

Exhibit 1 Groupe Ariel S.A. -- Selected Consolidated Financial Data (millions of Euros, except as noted) 2008 2007 2006 2005 2004 Sales Operating income Net income 3,345.3 61.2 (0.7) 3,561.8 189.2 85.7 3,576.9 172.9 61.2 3,078.9 163.5 88.2 3,050.3 149.9 85.7 Total assets Total debt Equity 2,809.3 660.6 782.6 2,764.9 616.0 819.5 2,899.6 613.0 829.7 3,129.0 578.4 941.0 2,445.5 504.2 865.1 Capital expenditures Depreciation R&D expenditures 87.6 195.0 17.5 100.0 209.4 20.0 95.1 214.0 19.0 240.9 152.9 48.2 234.1 155.0 46.8 Earnings/share (Euros) Dividend/share (Euros) Return on sales Return on equity (%) (0.0) 0.7 0.0% -0.1% 1.0 0.7 2.4% 10.5% 0.7 0.7 1.7% 7.4% 1.1 0.7 2.9% 9.4% 1.0 0.7 2.8% 9.9% Exhibit 2 Comparison of Projected Operating Data for Different Recycling Processes (thousands of pesos, unless noted) Assumes 7% Inflation in Mexico 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Projected Operating Costs, Manual Process Unit volume (000s) Materials Direct Labor Overhead Total Materials/unit Direct labor/unit 496 546 600 564,816 664,788 782,456 1,115,184 1,312,572 1,544,897 1,680,000 1,797,600 1,923,432 3,360,000 3,774,960 4,250,785 660 660 660 660 660 660 660 920,951 985,417 1,818,343 1,945,627 2,058,072 2,202,137 4,797,366 5,133,182 1,054,396 2,081,821 2,356,287 5,492,505 1,128,204 2,227,549 2,521,227 5,876,980 1,207,178 2,383,477 2,697,713 6,288,369 1,291,681 2,550,321 2,886,553 6,728,555 1,382,099 2,728,843 3,088,611 7,199,553 1.1387 2.2484 1.2185 2.4057 1.3037 2.5741 1.3950 2.7543 1.4927 2.9471 1.5971 3.1534 1.7089 3.3742 1.8286 3.6104 1.9566 3.8631 2.0935 4.1335 496 546 600 660 660 660 660 660 660 660 884,113 946,001 854,621 914,445 1,918,676 2,052,983 3,657,410 3,913,429 1,012,221 978,456 2,196,692 4,187,369 1,083,076 1,046,948 2,350,460 4,480,484 1,158,891 1,120,234 2,514,993 4,794,118 1,240,014 1,198,651 2,691,042 5,129,707 1,326,815 1,282,556 2,879,415 5,488,786 1.5333 1.4821 1.6406 1.5859 1.7554 1.6969 1.8783 1.8157 2.0098 1.9427 Projected Operating Costs, New Automatic Equipment Unit volume (000s) Materials Direct Labor Overhead Total Materials/unit Direct labor/ unit 542,223 638,197 751,158 524,136 616,909 726,101 1,566,211 1,675,846 1,793,155 2,632,571 2,930,951 3,270,414 1.0932 1.0567 1.1697 1.1307 1.2516 1.2098 1.3392 1.2945 1.4330 1.3852 Exhibit 2 Comparison of Projected Operating Data for Different Recycling Processes (thousands of pesos, unless noted) Inversin nuevo equipo Vida til Sistema de Amortizacin linea recta Amortizacin Devaluacin 3,517,800.00 10 aos Linea recta 351,780.00 5.5% Inflation (%) Mexico Inflation (%) Europa MXC/EUR 7% 3% 15.99 4% 0% 16.87 220,000.00 tc 4% 2% 17.80 MXC/EUR 4% 2% 18.78 15.99 WACC EN $ WACC EN EU 4% 2% 19.81 4% 1% 20.90 4% 1% 22.05 10.79% 6.66% 2% 0% 23.26 2% 0% 24.54 3% 0% 25.89 3% 0% 27.31 Assumes 7% Inflation in Mexico 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Projected Operating Costs, Manual Process Unit volume (000s) Materials Direct Labor Overhead Total Materials/unit Direct labor/unit 496 546 600 660 660 660 660 660 660 660 564,816 1,115,184 1,680,000 3,360,000 664,788 1,312,572 1,797,600 3,774,960 782,456 1,544,897 1,923,432 4,250,785 920,951 1,818,343 2,058,072 4,797,366 985,417 1,945,627 2,202,137 5,133,182 1,054,396 2,081,821 2,356,287 5,492,505 1,128,204 2,227,549 2,521,227 5,876,980 1,207,178 2,383,477 2,697,713 6,288,369 1,291,681 2,550,321 2,886,553 6,728,555 1,382,099 2,728,843 3,088,611 7,199,553 1.1387 2.2484 1.2185 2.4057 1.3037 2.5741 1.3950 2.7543 1.4927 2.9471 1.5971 3.1534 1.7089 3.3742 1.8286 3.6104 1.9566 3.8631 2.0935 4.1335 496 546 600 660 660 660 660 660 660 660 542,223 524,136 1,566,211 2,632,571 638,197 616,909 1,675,846 2,930,951 751,158 726,101 1,793,155 3,270,414 884,113 854,621 1,918,676 3,657,410 946,001 914,445 2,052,983 3,913,429 1,012,221 978,456 2,196,692 4,187,369 1,083,076 1,046,948 2,350,460 4,480,484 1,158,891 1,120,234 2,514,993 4,794,118 1,240,014 1,198,651 2,691,042 5,129,707 1,326,815 1,282,556 2,879,415 5,488,786 1.0932 1.0567 1.1697 1.1307 1.2516 1.2098 1.3392 1.2945 1.4330 1.3852 1.5333 1.4821 1.6406 1.5859 1.7554 1.6969 1.8783 1.8157 2.0098 1.9427 Projected Operating Costs, New Automatic Equipment Unit volume (000s) Materials Direct Labor Overhead Total Materials/unit Direct labor/ unit Exhibit 3 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008+ Selected Macroeconomic and Financial Market Data For Mexico Year-End Spot Exchange Consumer Price Real Growth Rate Inflation (%) GDP (%) (MXN/EUR) 9.5% 6.6% 9.4 6.4% -0.3% 9.5 5.0% 0.9% 10.4 4.3% 1.4% 12.9 4.7% 4.2% 15.3 3.3% 3.2% 13.3 4.1% 5.1% 14.4 3.8% 3.3% 16.2 7.0% (long-term Mexico inflation) DATO DEL CASO Source: Mexico Country Reports, Economist Intelligence Unit (EIU) Short-Term Bank Lending Date Rate1 31-Mar-06 7.78% 30-Jun-06 7.68% 29-Sep-06 7.50% 29-Dec-06 7.60% 28-Mar-07 7.68% 27-Jun-07 7.82% 26-Sep-07 7.77% 31-Dec-07 8.00% 26-Mar-08 7.94% 23-Jun-08 8.10% Sources: JP Morgan Mexico 7-10 Year Corporate Bonds2 8.20% 9.35% 8.22% 7.42% 7.50% 7.68% 7.86% 8.17% 7.42% 9.21% 1. Bank of Mexico 2. Thomson Datastream & CEIC 3. Global Financial Data 10-year Government Bonds3 8.47% 9.06% 8.24% 7.42% 7.58% 7.19% 7.82% 8.08% 7.49% 9.12% Exhibit 4 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008+ Selected Macroeconomic and Financial Market Data For France Year-End Consumer Price Real Growth Exchange Rate Inflation (%) GDP (%) (MXN/EUR) 1.7% 4.2% 9.4 1.6% 2.1% 9.5 1.9% 1.1% 10.4 2.1% 0.5% 12.9 2.3% 2.3% 15.3 1.7% 1.9% 13.3 1.7% 2.4% 14.4 1.5% 2.3% 16.2 3.0% (long-term France inflation) DATO ADICIONAL Source: France Country Reports, Economist Intelligence Unit (EIU) Date 31-Mar-06 30-Jun-06 30-Sep-06 31-Dec-06 31-Mar-07 30-Jun-07 30-Sep-07 31-Dec-07 31-Mar-08 23-Jun-08 Sources: Short-Term Bank Lending Rate1 3.08% 3.27% 3.63% 4.07% 4.42% 4.69% 4.91% 5.13% 4.81% 4.99% JP Morgan France 7-10 Year Corporate Bonds2 3.73% 4.03% 3.69% 3.96% 4.08% 4.60% 4.36% 4.34% 4.00% 4.75% 10-year Government Bonds3 3.79% 4.08% 3.72% 3.98% 4.11% 4.62% 4.41% 4.42% 4.11% 4.81% 1. Thomson Datastream, accessed 25 February 2010 2. Thomson Datastream, accessed 25 February 2010 3. Global Financial Data, accessed 25 February 2010 RESUMEN WACC DISC. RATE IN $ DISCOUNT RATE IN EUR D/E 84% 10.8% Ariel $ Tasa de descuent o 0% 11.1% 7.0% (1 + inflacin Mexico) (1 + WACC EN $) x 10.8% (1 + inflacin EU) 3.0% 7.0% (1 + inflacin Mexico) (1 + WACC EN $) x 15.4% (1 + inflacin EU) 3.0% -1 = -1 = 15.1% 19.9% WACC Pesos Mexicanos Euros ESTRUCTURA CAPITAL D/E Target % Deuda % Equity 84% 46% 54% 84% 46% 54% COSTO DEUDA ("Kd") Kd pre-tax Tax rate Kd after-tax 8.1% 35% 5.3% 5.0% 35% 3.2% US Treasury (10 Yr) Mexico Spread Beta Equity Risk Premium Ke 4.7% 4.4% 1.00### 6.3% 15.4% 4.7% 0.0% 1.00 4.8% 9.5% Beta Estimates Beta Levered D/E (asociado al Beta) Beta Unlevered (bu) Target D/E Beta Re-levered (be) 1.00 84% 0.65 84% 1.00 1.00 84% 0.65 84% 1.00 Tasa de Descuento 10.79% 6.66% COSTO EQUITY ("Ke") WACC Comentarios Incognita? Promedio 10 aos (investing.com) Beta Xerox Incognita? Supuesto provisto Target 10% de Ex. 13 bu = be / [1 + ( (1 - tx %) x D/E)] Analisis de escenarios be = bu x [1 + ( (1 - tx %) x D/E)] Yahoo finance WACC Pesos Mexicanos Euros ESTRUCTURA CAPITAL D/E Target % Deuda % Equity 0% 0% 100% 0% 0% 100% COSTO DEUDA ("Kd") Kd pre-tax Tax rate Kd after-tax 8.1% 35% 5.3% 5.0% 35% 3.2% US Treasury (10 Yr) Mexico Spread Beta Equity Risk Premium Ke 4.7% 4.4% 1.00### 6.3% 15.4% 4.7% 0.0% 1.00 6.3% 11.0% Beta Estimates Beta Levered D/E (asociado al Beta) Beta Unlevered (bu) Target D/E Beta Re-levered (be) 1.00 0% 1.00 0% 1.00 1.00 0% 1.00 0% 1.00 Tasa de Descuento 15.42% 11.03% COSTO EQUITY ("Ke") WACC Comentarios Incognita? Beta Xerox Damodaran Risk premium Mexico Supuesto provisto Target 10% de Ex. 13 bu = be / [1 + ( (1 - tx %) x D/E)] Analisis de escenarios be = bu x [1 + ( (1 - tx %) x D/E)] Yahoo finance IPC Francia IPC FR ltimos aos perodo inflacin abril 2016 -0,189 % abril 2015 0,080 % abril 2014 0,724 % abril 2013 0,679 % abril 2012 2,092 % abril 2011 2,078 % abril 2010 1,686 % abril 2009 0,126 % abril 2008 3,028 % abril 2007 1,261 % Mexico 2008 6.53 2009 3.57 2010 4.40 2011 3.82 2012 3.57 2013 3.97 2014 4.08 2015 2.13 2016/4 0.65