We used three methods to determine Aeroflot’s target price:

1. Present and future multiples relative to international peers;

2. DCF;

3. EBITDA multiple.

We have already demonstrated that the company is undervalued by more than 40% compared with GEM peers on this year’s multiples.

In our DCF model for Aeroflot for 2004—2010, we use a WACC of 14.3% as a discount rate. The DCF model built for the base-case scenario values the company at $1.20 per ordinary share for the end of 2004. This is our maximum for the fair value. Under DCF, 61% of the present EV comes from the perpetuity period.