First, Heidi estimated the expected revenue growth rate for the short term (Years 1-5) and the long term (Years 6 and beyond). In reviewing the data in exhibit 4.5, Heidi noted that Sooner Clinics and all of the recent practice acquisitions are located in the same geographic area, so it is reasonable to assume that Sooner Clinics faces the same estimated long-term (Years 6 and beyond) revenue growth rate of 2 percent. However, Heidi has found that the short-term (Years 1- 5) revenue growth rate of a particular practice depends on the current level of physician productivity: Clinics with relatively low physician productivity have higher short-term (Years 1- 5) revenue growth rates because of room for productivity increases. Heidi also believes that there is an opportunity for improved coding and documentation, better revenue cycle management, and an updated chargemaster at Sooner Clinics. Next, Heidi assembled the information required for the discounted cash ow (DCF) approach, including the estimated required rate of return on an equity investment in Sooner Clinics. Little market data about primary care practices are available to offer guidance, but the current yield on long-term Treasury bonds is 4 percent, and the historical risk premium on the market, which reects the premium on an average-risk common stock investment, is about 5 percent. Of course, significant risk and liquidity differences exist between direct ownership of a relatively small group practice and ownership of the stock of a large, publicly traded corporation. UHSC also informed Heidi that it estimates its tax rate will be 20 percent for the foreseeable future. In addition to the DCF approach, Wilde and Sullivan use three market multiple methods to value medical practices: physician FTEs, net patient revenue, and EBITDA (earnings before