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Schweitzer-‐Mauduit's As-‐Stated AEG Sensitivity Analysis Growth Rate Cost of Equity 0.0% -‐10.0% -‐20.0% -‐30.0% -‐40.00% -‐50.00% -‐60.00% 8.39% 1.7 1.76 1.78 1.79 34.73 1.79 1.89.70% 0.9 1.25 1.36 1.41 1.45 1.47 1.4911.01% 0.5 0.93 1.08 1.16 1.21 1.24 1.2712.32% 0.3 0.74 0.9 0.99 1.04 1.08 1.113.63% 0.21 0.61 0.77 0.86 0.92 0.96 0.9814.94% 0.17 0.53 0.69 0.77 0.82 0.86 0.8916.25% 0.17 0.48 0.62 0.7 0.75 0.79 0.8215% Analyst Position Undervalued > $58.6 $43.31 < Fairly Valued < $58.60 Overvalued < $43.31 Schweitzer-‐Mauduit's Re-‐Stated AEG Sensitivity Analysis Growth Rate Cost of Equity 0.0% -‐10.0% -‐20.0% -‐30.0% -‐40.00% -‐50.00% -‐60.00% 8.39% 1.87 2.72 2.97 3.09 3.16 3.21 3.249.70% 1.06 2.04 2.37 2.53 2.62 2.69 2.7311.01% 0.68 1.63 1.97 2.14 2.24 2.32 2.3712.32% 0.51 1.37 1.69 1.86 1.97 2.04 2.0913.63% 0.46 1.2 1.5 1.66 1.76 1.83 1.8814.94% 0.45 1.09 1.36 1.51 1.61 1.67 1.7216.25% 0.47 1.01 1.26 1.39 1.48 1.54 1.5915% Analyst Position Undervalued > $58.6 $43.31 < Fairly Valued < $58.60 Overvalued < $43.31 We used a 15% margin of acceptance, which means any number in between 43.31 and58.60 is fairly valued. The AEG sensitivity analysis shows that for both as stated and restatedthe change in the cost of equity and growth rates results in very small changes to price. It alsoshows that no matter how high or low each variable is, <strong>SWM</strong> is a highly overvalued firm. Wetake great consideration in the AEG model to determine the value of <strong>SWM</strong> because of its highexplanatory power. Therefore, we can safely say that Schweitzer-Mauduit is overvalued.174
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