Estimate the standalone value of Gillette at the end of year 2004 under the following assumptions. Do you agree with Gillette's valuation in exhibit 6? (You will have to compute Gillette's price per share.)

Revenue Growth: 10% in 2005 (over 2004) and so on until 2009; 4% in 2010 (over 2009) and onward

EBIT Growth: 10% in 2005 (over 2004) and so on until 2009; 4% in 2010 (over 2009) and onward

Depreciation and Amortization Growth: 10% in 2005 (over 2004) and so on until 2009; 4% in 2010 (over 2009) and onward

NWC to Sales ratio: 12.5%

Property, Plant, & Equipment (PP&E) Growth: 2.5% in 2005 (over 2004) and onward

Hint: Capital expenditure (capex) is derivable from PP&E as change in PP&E across two consecutive years.

(Ignore goodwill and intangible assets.)

Terminal Growth Rate in Free Cash Flows (FCFs): 4%

Tax Rate: 30%

Cost of Capital: 10%