consolidated

MIDLAND ENERGY

company

D/E EQUITY BETA ASSET BETA

59
1.25
0.923190547

CONSOLIDATED
E& P
REFINING
PETROCHEMICALS

85
45
67

1.41
1.33
0.87
EQUITY MV

0.933774834
1.047244094
0.620542083
NET DEBT

EXPLORATION
JACKSON ENERGY
WIDE PLAIN
CORSICANA ENERGY
WORTHINGTON PETRO

57931
46089
42263
27591

6480
39375
6442
13098

60356
15567
9204
2460
18363
32662
48796

6200
3017
1925
-296
5931
6743
24525

134114

79508

AVERAGE
REFINING
BEXAR ENERGY
KIRK
WHITE POINT
PETRACH FUEL
ARKANA PETRO
BEAUMONT ENERGY
DAMERON FUEL
AVERAGE
MIDLAND ENERGY

information
LTM REVENUE NET INCOME
248518
18701

22357
202971
23189
D/E

12556
4047
2097
EQUITY BETA ASSET BETA

11.2
85.4
15.2
47.5

0.89
1.21
1.11
1.39

39.825

10.3
19.4
20.9
-12
32.3
20.6
50.3

18512
17827
14505
12820

0.93

1.7
0.94
1.78
0.24
1.25
1.04
1.42

20.25714286
59.3

0.83
0.80
1.02
1.08

LTM REVENUE

1.60
0.84
1.58
0.26
1.05
0.93
1.09

160708
67751
31682
18874
49117
59989
58750

1.05
1.25

0.92

251003

LTM EARNINGS

4981
8495
4467
3506

9560
1713
1402
112
3353
1467
4646

18888

TARGET D/E

TARGET D/V

MIDLAND ENERGY
TARGET CONSOLIDATED
EXPLORATION
REFINING
PETROCHEMICALS

73

42.2

85.2
44.9
66.7

46
31
40

CURRENT CONSOLIDATED

37.2

ASSUMPTION
DEBT BETA
30 YR T BOND
EQUITY RISK PREMIUM
TAX RATE

0
4.98
5
40

ASSET BETA

EQUITY BETA

COST OF EQUITY

COST OF DEBT

0.92

1.32

11.59

6.6

0.93
1.05
0.62

1.41
1.33
0.87

12.01
11.64
9.32

6.58
6.78
6.33

0.92

1.25

11.24

6.6

WACC

8.3729
8.2999
9.2957
7.1116
8.53

WACC
ASSET TYPE

CALCULATOR
TARGET
DEBT RATIO

E&P
E&P
E&P
E&P
E&P
E&P

TARGET
EQUITY RATIO

55
50
46
40
35
30

45
50
54
60
65
70

COST OF EQUITY CALCULATOR

ASSET TYPE

E&P
E&P
E&P
E&P
E&P
E&P

RIEK FREE

UNLEVERED
ASSET BETA
4.98
4.98
4.98
4.98
4.98
4.98

0.93
0.93
0.93
0.93
0.93
0.93

UNLEVERED ASSET BETA

COMPARABLE OBSERVED
COMPANIES
EQUITY BETA
ASSET TYPE
E&P

JACKSON
WIDE PLAIN
CORSICANA
WORTHINGTON

0.89
1.21
1.11
1.39

CORP
TAX RATE

SPREAD
T BOND

40
40
40
40
40
40

TARGET
EQUITY

COST OF
DEBT
1.62
1.62
1.62
1.62
1.62
1.62

ADJ TARGET
EQUITY RATIO
45
50
54
60
65
70

0.577
0.625
0.662
0.714
0.756
0.795

MV EQUITY MV DEBT

40055
31867
29222
19078

COST OF
EQUITY
6.6
6.6
6.6
6.6
6.6
6.6

LEVERED
EQUITY BETA

MARKET
RISK PREMIUM

1.62
1.49
1.41
1.31
1.23
1.17

MV EQUITY
RATIO

4481
27225
4454
9056

13.08
12.43
12.03
11.53
11.13
10.83

0.899
0.539
0.868
0.678

5
5
5
5
5
5

ADJ
EQUITY RATIO

0.937
0.661
0.916
0.778

WACC
8.064
8.195
8.3178
8.502
8.6205
8.769

COST OF
EQUITY
13.08
12.43
12.03
11.53
11.13
10.83

UNLEVERED
ASSET BETA

0.83
0.8
1.02
1.08
0.9325

0.83393
0.79981
1.01676
1.08142