What does this information tell us?

6 Beta 7 8 9 9 10 40.0% 0.0% 42.2% 11 Assumptions: Marginal Tax Rate Debt Beta Target DNV Treasury Rates: 1-Year 10-Year 30-Year 12 13 14 4.54% 4.66% 4.98% 15 16 17 Interest Rate Spread & Leverage Calculation 18 19 20 Business Segment: : Credit Rating A+ Debt/ Value 21 22 Spread to Treasury 0.00% Target Consolidated 42.2% 23 24 A+ 46.0% 25 Exploration & Production Refining & Marketing Petrochemicals 31.0% BBB AA- 1.60% 1.80% 1.35% % 40.0% 26 27 28 29 Historical Beta Calculation 30 31 Calculate the Equity and Asset Beta of the Consolidated company and each of its three business units. 32 33 Midland Energy Resources: LTM Asset Beta 34 Equity Beta 1.25 D/E 0.0% Revenue 248,518 Net Income 18,701 % Earnings 0.0% 35 Consolidated 36 37 0.00 38 Exploration & Production Refining & Marketing Petrochemicals 0.00 7 22,357 202,971 23,189 12,556 4,047 2,097 0.0% 0.0% 0.0% 39 40 41 6 Beta 7 8 9 9 10 40.0% 0.0% 42.2% 11 Assumptions: Marginal Tax Rate Debt Beta Target DNV Treasury Rates: 1-Year 10-Year 30-Year 12 13 14 4.54% 4.66% 4.98% 15 16 17 Interest Rate Spread & Leverage Calculation 18 19 20 Business Segment: : Credit Rating A+ Debt/ Value 21 22 Spread to Treasury 0.00% Target Consolidated 42.2% 23 24 A+ 46.0% 25 Exploration & Production Refining & Marketing Petrochemicals 31.0% BBB AA- 1.60% 1.80% 1.35% % 40.0% 26 27 28 29 Historical Beta Calculation 30 31 Calculate the Equity and Asset Beta of the Consolidated company and each of its three business units. 32 33 Midland Energy Resources: LTM Asset Beta 34 Equity Beta 1.25 D/E 0.0% Revenue 248,518 Net Income 18,701 % Earnings 0.0% 35 Consolidated 36 37 0.00 38 Exploration & Production Refining & Marketing Petrochemicals 0.00 7 22,357 202,971 23,189 12,556 4,047 2,097 0.0% 0.0% 0.0% 39 40 41