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Conrail Val2
Conrail Val2
CSX1
CSX2
NS
ss if rival gets it
rgies plus loss if rival gets it
Conrail Valuation
CSX Valuation 1
Re
15.93%
Required return
4%
35%
$
$
2164.351077
90.5
23.92
$71.00
94.92
=
=
Rf
6.83%
1997
0
1998
188
1999
396
2000
550
0
0
122
91
257
165
358
198
2001
567
4943
3581
1710
+
+
Beta
1.3
Conrail Valuation
CSX Valuation 2
Re
15.93%
Required return
=
=
Rf
6.83%
Gain
Gain in Operating Income
TV w. const growth model at 4%
After tax
35%
PV
NPV
2864.457
Shares
90.5
NPV per share
$ 31.65
1997
0
1998
240
1999
521
2000
730
0
0
156
116
339
217
475
263
Opportunity Cost
Loss if rival gets target
TV w. const growth model at 4%
After tax
35%
PV
NPV
-742.462
Shares
90.5
NPV per share
$ (8.20)
1997
0
1998
-66
1999
-123
2000
-189
0
0
-43
-32
-80
-51
-123
-68
Pre-merger
Gain
Opp cost
Total
$71.00
$ 31.65
$
8.20
$110.86
2001
752
6556
4750
2268
2001
-196
-1709
-1238
-591
+
+
Beta
1.3
Conrail Valuation
NS Valuation 2
Re
15.93%
Required return
=
=
Rf
6.83%
Gain
Gain in Operating Income
TV w. const growth model at 4%
After tax
35%
PV
NPV
2579.353
Shares
90.5
NPV per share
$ 28.50
1997
0
1998
231
1999
429
2000
660
0
0
150
112
279
179
429
238
Opportunity Cost
Loss if rival gets target
TV w. const growth model at 4%
After tax
35%
PV
NPV
-1235.74
Shares
90.5
NPV per share
$ (13.65)
1997
0
1998
-130
1999
-232
2000
-308
0
0
-85
-63
-151
-97
-200
-111
Pre-merger
Gain
Opp cost
Total
$71.00
$ 28.50
$ 13.65
$113.16
2001
680
5928
4295
2051
2001
-320
-2790
-2021
-965
+
+
Beta
1.3