***PLEASE SHOW ALL CALCULATIONS***

Dupont Performance Coatings

Using Exhibit 9, estimate the dollar increase in DPCs value, relative to the stand-alone value, if a PE fund can obtain:

a. 5% revenue growth per year (instead of 4%) in each of the next 5 years and improve the operating margin to be 12% (instead of 10%)

b. assume part a and that the division can be sold at 7.5 X EBITDA in 5 years (for day 2)

c. assume that debt financing equal to 5X forward EBITDA can be obtained. Assume that all cash available is used to pay down debt and after 5 years the firm reverts to an all-equity financed firm.