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Inputs for WACC Calculation:

Risk free rate (%) Yield-to-Maturity of debt (%)

 

3.25%

1)

6.73%

2)

Equity risk premium (%) Beta of stock

3.46%

2)

0.73

3)

Corporate tax rate (%)

34%

4)

Common shares (MM) Share price ($)

429.7

5)

$

25.51

3)

Market value of debt ($, MM)

$ 3,274.8

6)

Source:

1) US Federal Reserve 13-8-

2011

http://www.federalreserve.gov/d atadownload/Output.aspx?rel=

H15&series=bcb44e57fb57efbe

90002369321bfb3f&lastObs=&f

rom=&to=&filetype=csv&label=i nclude&layout=seriescolumn 2) Notes - ConAgra Foods 3) Google Finance NYSE:CAG 13-8-2011 4) ConAgra Foods Annual Report 2011 p.22 5) ConAgra Foods Annual Report 2011 p.54 6) ConAgra Foods Annual Report 2011 p.56

Notes - ConAgra Foods Source: ConAgra Foods Annual Report 2011 p.56

Senior Debt

8.25% senior debt due September 2030

7.0% senior debt due October

2028

6.7% senior debt due August

2027

7.125% senior debt due October 2026

7.0% senior debt due April

2019

5.819% senior debt due June

2017

5.875% senior debt due April

2014

6.75% senior debt due September 2011 7.875% senior debt due September 2010 2.00% to 9.59% lease financing obligations due on various dates through 2029 Other indebtedness 9.75% subordinated debt due March 2021

Total debt

$

$

300.00

382.20

$ 9.20

$

$

$

$

$

372.40

500.00

500.00

500.00

342.70

$ -

$

105.40

67.00

195.90

$ 3,274.80

$

$

Weighting

9.16%

11.67%

0.28%

11.37%

15.27%

15.27%

15.27%

10.46%

0.00%

3.22%

2.05%

5.98%

1) Taking mid-point between two interest rates 2) Assume that the debts are liabilities of Lamb Weston BSW. Therefore interest rate is LIBOR plus 200 basis points (2%)

Source: Google Finance NYSE:CAG 13-8-2011

Date May 4, 2011 May 3, 2011

Open

High

25.01

24.61

25.82

24.84

Interest

rate

Weighted

interest

rate

8.250%

0.76%

7.000%

0.82%

6.700%

0.02%

7.125%

0.81%

7.000%

1.07%

5.819%

0.89%

5.875%

0.90%

6.750%

0.71%

7.875%

0.00%

5.795%

0.19% 1)

0.00% 2)

9.750%

0.58%

6.73%

Low

Close

24.87

25.51

24.56

24.75

Source: Zacks Investment Research - CAG: CONAGRA FOODS INC - Stock Earnings

Estimateshttp://www.zacks.com/research/report.php?type=estimates&t=CAG retrieved

14-8-2011

Source: For dividends, Digital Look retrieved 14-8-2011 CAG Forecasts

Year Ending

EPS $

P/E

EPS GrthDiv

 

31-May-11

2

13.2

4% 87.17¢

Expected Price

$

26.40

Notes Multiplying EPS by P/E ratio

Expected Dividend

$

0.8717

Total

$

27.27

Adding the above two values

Expected Return

6.91%

Dividing total (B35) by closing price on date of announcement

Risk free rate

3.45%

Using 10 year US Treasury Bill rate

Equity risk premium

3.46%

Subtracting Risk free rate from Expected Return

Weighted Average Cost of Capital (WACC) Calculation

Debt

Equity

Total

Pre-tax cost of debt (%) After-tax cost of debt (%)

6.7%

   

4.4%

Cost of equity (%)

5.8%

Market value of debt ($, MM)

$ 3,274.8

Market value of equity ($, MM)

$

10,961.6

Enterprise Value ($, MM)

$ 14,236.4

Percent of enterprise value (%)

23.0%

Percent of enterprise value (%)

77.0%

Percent of enterprise value

100.0%

Weighted Average Cost of Capital (WACC, %)

 

5.5%

Inputs for WACC Calculation:

Risk free rate (%) Yield-to-Maturity of debt (%)

 

3.25%

1)

5.97%

2)

Equity risk premium (%) Beta of stock

0.13%

2)

0.27

3)

Corporate tax rate (%)

36%

4)

Common shares (MM) Share price ($)

54.8

5)

$

87.39

3)

Market value of debt ($, MM)

$ 2,204.3

6)

Source:

1) US Federal Reserve 13-8-

2011

http://www.federalreserve.gov/d atadownload/Output.aspx?rel=

H15&series=bcb44e57fb57efbe

90002369321bfb3f&lastObs=&f

rom=&to=&filetype=csv&label=i nclude&layout=seriescolumn 2) Notes - Ralcorp 3) Google Finance NYSE:RAH 14-8-2011 4) Ralcorp Holdings 10-Q Quarterly report pursuant to sections 13 or 15(d) 5-5-2011 p.22 5) Ralcorp Holdings 10-Q Quarterly report pursuant to sections 13 or 15(d) 5-5-2011 p.7 6) Ralcorp Holdings 10-Q Quarterly report pursuant to sections 13 or 15(d) 5-5-2011 p.13

Notes - Ralcorp Source: Ralcorp Holdings 10-Q Quarterly report pursuant to sections 13 or 15(d) p.13 Weighted

Senior Debt

Interest

rate

Weighting

interest

rate

Fixed Rate Senior Notes, Series C Fixed Rate Senior Notes, Series D Fixed Rate Senior Notes, Series E Fixed Rate Senior Notes, Series F Fixed Rate Senior Notes, Series I-1 Fixed Rate Senior Notes, Series I-2 Fixed Rate Senior Notes, Series J Fixed Rate Senior Notes maturing 2018 Floating Rate Senior Notes maturing 2018 Fixed Rate Senior Notes maturing 2020

4.95% Senior Notes maturing

2020

Fixed Rate Senior Notes maturing 2039

Fixed Rate Senior Notes, Series 2009A Fixed Rate Senior Notes, Series 2009B

2010 Revolving Credit

Agreement

2010 Term Loan

$

50.00

2.27%

5.430%

0.12%

$

32.10

1.46%

4.760%

0.07%

$

100.00

4.54%

5.570%

0.25%

$

75.00

3.40%

5.430%

0.18%

$

75.00

3.40%

5.560%

0.19%

$

25.00

1.13%

5.580%

0.06%

$

100.00

4.54%

5.930%

0.27%

$

577.50

26.20%

7.290%

1.91%

$

20.00

0.91%

2.850%

0.03%

$

67.00

3.04%

7.390%

0.22%

$

300.00

13.61%

4.950%

0.67%

$

450.00

20.41%

6.630%

1.35%

$

50.00

2.27%

7.450%

0.17%

$

50.00

2.27%

7.600%

0.17%

$

37.70

1.71%

2.710%

0.05%

$

195.00

8.85%

2.750%

0.24%

$ 2,204.30

 

5.97%

Source: Google Finance NYSE:RAH 14-8-2011

Date

Open

High

Low

Close

May 4, 2011

89.86

90.2

86.56

87.39

May 3, 2011

84.13

84.29

82.3

83.33

Source: Zacks Investment Research - RAH: RALCORP HLDGS INC NEW - Stock Earnings Estimates

http://www.zacks.com/research/report.php?type=estimates&t=RAH retrieved 14-8-2011 RAH Forecasts

Year Ending

EPS ($)

P/E

Div

 

30-Sep-11

5.84

15.5 n/a

Expected Price

$

90.52

Notes Multiplying EPS by P/E ratio

Expected Dividend

$

-

Total

$

90.52

Adding the above two values

Expected Return

3.58%

Dividing total (B35) by closing price on date of announcement

Risk free rate

3.45%

Using 10 year US Treasury Bill rate

Equity risk premium

0.13%

Subtracting Risk free rate from Expected Return

Weighted Average Cost of Capital (WACC) Calculation

Debt

Equity

Total

Pre-tax cost of debt (%) After-tax cost of debt (%)

6.0%

   

3.8%

Cost of equity (%)

3.3%

Market value of debt ($, MM)

$ 2,204.3

Market value of equity ($, MM)

$

4,786.3

Enterprise Value ($, MM)

$

6,990.6

Percent of enterprise value (%)

31.5%

Percent of enterprise value (%)

68.5%

Percent of enterprise value

100.0%

Weighted Average Cost of Capital (WACC, %)

 

3.5%