Muhammad Mirza Maulana

WACC For Midland Case

1 TAXES
Year 2004 2005 2006
IBT 17910 32723 30447
Taxes 7414 12830 11747
% 0.4140 0.3921 0.3858

AVR 0.3973 / 40%

2 RATIO
Name D E V
42. 57. 10
Consolidated 2 8 0
Exploration & 10
producton 46 54 0
10
Refining & marketing 31 69 0
10
Petrochemical 40 60 0

3 rd (RF + Spread to treasury)

Spre
Name RF ad rd
4.9
30 years
Consolidated 8 1.62 6.6
Exploration & 4.9 6.5
30 years
producton 8 1.6 8
4.9 6.7
30 years
Refining & marketing 8 1.8 8
4.6 6.0
10 years
Petrochemical 6 1.35 1

4 re=Rf+B(ERM)
B= ER
re
Name RF bl M
4.9 12.9
Consolidated 8 1.59 5.0 5
 4.9 13.6
Exploration & producton 8 1.73 5.0 1
4.9 12.5
Refining & marketing 8 1.52 5.0 8
4.6 10.8
Petrochemical 6 1.23 5.0 1

5 bl = bu/(1-(D/V)
bu = Equity beta x (1-Market leverage)
Eb = [1+(1-t)*D/V]*Bu
bu = Eb/[1+(1-t)*D/E]
D/
bl
Name Eb Taxes V D/E bu
1.2 0.397 0.4 0.59 0.92
1.59
Consolidated 5 3 2 3 1
0.397 0.4
1.73
Exploration & producton 3 6 0.93
0.8 0.397 0.11
Jackson Energy 9 3 2 0.83
1.2 0.397 0.85
Wide plain ptroleum 1 3 4 0.80
1.1 0.397 0.15
Corsicana energy corp 1 3 2 1.02
1.3 0.397 0.47
Worthington Petroluem 9 3 5 1.08
0.397 0.3
1.52
Refining & marketing 3 1 1.05
0.397 0.10
Bexar Energy 1.7 3 3 1.60
0.9 0.397 0.19
Kirk Corp 4 3 4 0.84
1.7 0.397 0.20
White Point Energy 8 3 9 1.58
0.2 0.397 -
Petrarch Fuel Services 4 3 0.12 0.26
1.2 0.397 0.32
Arkana Petroleum Corp 5 3 3 1.05
1.0 0.397 0.20
Beaumont Energy 4 3 6 0.93
1.4 0.397 0.50
Dameron Fuel Services 2 3 3 1.09
0.397
Petrochemical 3 40 1.23
6 bl petrochemical from Assets
TA TA TA Avarage
bl
Name 2004 2005 2006 TA
1.5
Consolidated 9
Exploration & 7686 1250 1401 114002. 1.7
producton 6 42 00 67 3
Refining & 6068 9162 9382 82048.6 1.5
marketing 8 9 9 7 2
1994 2800 2845 25464.3
Petrochemical 3 0 0 3
221515.
Total Av TA 67
bl consolidated = (Av TA E&P/Total Av TA*bl E&P) + (Av TA
R&M/Total Av TA*bl R&M) + (Av TA Petro/Total Av TA*Petro)
1.59 = 0.89 + 0.56 + (0.11 * bl petro)

= 1.23

Re : Rf + Bl(EMRP)
Consolidate
7 d E&P R&M Petro
Rf 4.98% 4.98% 4.98% 4.66%
Bl 1.59 1.73 1.52 1.23
EMRP 5% 5% 5% 5%
13.63 12.58 10.81
Re 12.93% % % %

E/V
8 Consolidate E&P R&M Petro
D/V 42.20% 46% 31% 40%
D 42.2 46 31 40
V 100 100 100 100
E 57.8 54 69 60
E/V 0.578 0.54 0.69 0.6

WACC
Consolid
9 ate E&P R&M Petro
Rd 6.60% 6.58% 6.78% 6.01%
D/V 42.20% 46% 31% 40%
60.27 60.27 60.27
1-T 60.27% % % %
Re 12.95% 13.61 12.58 10.81
 % % %
E/V 58% 54% 69% 60%
WA 9.19 9.1 9.9 7.9
CC % 7% 5% 3%