Tax Rate 37%

Risk Free Return (rf) 2.80%

Market Premium (rm -rf) 6%

Company Rating Cost of Equity Beta Debt Total Equity

Debt (rd)
Chestnut (Entire Firm) A- 3.5% 0.9 461 1840

Cost of
Instrument Industry Company Rating Equity Beta Debt Total Equity
Debt (rd)

Badger meter BBB- 4.6% 1.06 89 723

Bresser Rand BB 6.5% 1.4 1287 4549
Flowserve BBB- 4.6% 1.3 1200 10767
Honeywell A 3.3% 1.25 8829 74330
Idex BBB 4.1% 1.15 774 5933
Measurement Specialties BBB 4.1% 1.35 129 944
Mettler-Toledo A 3.3% 1.1 413 7154
Wendell Indtruments NA 0.0% 0.52 0 230
Average 3.81% 1.14 1590 13079

Levered Betaindustry 1.14125

Unlevered Beta industry 1.06

Levered Beta| Chestnut Instrument 1.23

Cost of Equity|Chestnut Instrument 10.16%
Post Tax Cost of Debt|Chestnut Instrument 2.40%
WACC|Chestnut Instrument 8.6%
Debt/ Equity+Debt Post tax Cost of Debt Equity/ Cost of equity (re) E/V x COE WACC
Equity+Debt
0.20034767492395 0.44% 0.80 8.20% 6.56% 7.00%

Equity/
Debt/ Equity+Debt Post tax Cost of Debt Cost of equity (re) E/V x COE WACC
Equity+Debt

0.10960591133005 0.32% 0.89 9.16% 8.16% 8.47%

0.22052775873886 0.90% 0.78 11.20% 8.73% 9.63%
0.10027575833542 0.29% 0.90 10.60% 9.54% 9.83%
0.10617010786566 0.22% 0.89 10.30% 9.21% 9.43%
0.11540181899508 0.30% 0.88 9.70% 8.58% 8.88%
0.12022367194781 0.31% 0.88 10.90% 9.59% 9.90%
0.05457909343201 0.11% 0.95 9.40% 8.89% 9.00%
0 0.00% 1.00 5.92% 5.92% 5.92%
0.10 0.31% 0.90 9.65% 8.58% 8.88%