Estimated Value of Netscape - Scenarios 1-3 (1995 is actual value, 1996-2005 are forecasts) all dollar and share amounts in thousands 1995 1996 1997 1998 1999 2000 2001 FCF -11,375 -13,260 -13,769 -10,809 -406 13,654 36,471 Terminal Value Now suppose we are confident in our estimated free cash flows from 1996-2001. What is the estimated market value of Netscape under these three scenarios? Assume incur loss of -11,375 immediately, -13,260 in one year, etc. SCENARIO 1 Assumptions: Discount rate is 12%. Growth rate from 2001-2005 is approximately $5% per year. Growth rate after 2005 is 4% every year, thus free-cash flow in 2006 will be (free-cash flow in 2005 * 1.04). SCENARIO 2 Assumptions: Discount rate is 12%. Growth rate from 2001-2005 is approximately 30% per year. Growth rate after 2005 is 4% every year, thus free-cash flow in 2006 will be (free-cash flow in 2005 * 1.04). SCENARIO 3 Assumptions: Discount rate is 12%. Growth rate from 2001-2005 is approximately 100% per year. Growth rate after 2005 is 4% every year, thus free-cash flow in 2006 will be (free-cash flow in 2005 * 1.04)