What is the present value of the projected merger benefits as of December 31, 2015?...
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What is the present value of the projected merger benefits as of December 31, 2015? Assume a WACC% of 6.18% and a terminal growth rate of 2.50% from 2022 onwards.
| Projected Merger Benefits ($ millions) | ||||||
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
| Pre-Merger Operational Improvements | ||||||
| Phase-in (%) | 17% | 42% | 67% | 92% | 100% | 100% |
| Increase in EBIT | $ 214 | $ 529 | $ 844 | $ 1,159 | $ 1,260 | $ 1,260 |
| Post-Mergert Combination Synergies | ||||||
| Phase-in(%) | 0% | 0% | 25% | 50% | 75% | 100% |
| Increase in EBIT | $ - | $ - | $ 124 | $ 248 | $ 371 | $ 495 |
| Porjected Total Increase in CP-NS EBIT | $ 214 | $ 529 | $ 968 | $ 1,407 | $ 1,631 | $ 1,755 |
| Incremental Cash Flows (EBIT*(1-t)) | $ 136.96 | $ 338.56 | $ 619.52 | $ 900.48 | $ 1,043.84 | $ 1,123.20 |
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