from the discount rate results in an after tax Net Cash Flow to Equity Capitalization Rate for Next Year of 19.06%. 5.2.3 Calculation of Estimated Operating Value Recall that the Single Period Capitalization Method is based on the concept that today’s value can be derived from a stabilized income stream that is capitalized by an appropriate capitalization and can simply be presented in the following formula Value = Income ÷ Capitalization Rate In order to implement this method appropriately, the income stream needs to be forecasted out one year using the long‐term sustainable growth rate (3.0%) as this was deducted from the discount rate to arrive at the appropriate capitalization rate. The result of these calculations results in an indicated value for the Company operation. However, the non‐operating assets need to be added to the calculated indicated value to arrive at the full equity value of the Company at June 30, 2006. These will be added at the end of the analysis. The following table illustrates the calculation using the Single Period Capitalization Method to derive an estimate of enterprise value under the Income Approach
