1. J. K. Dietrich - FBE 532 – Spring 2006 Eskimo Pie Case January 19, 2006

2. J. K. Dietrich - FBE 532 – Spring 2006 Basic Steps to Valuation in Finance u Estimate cash flows –Cash - after tax, consumable –Sometimes easy (fixed incomes), sometimes hard (residual claims) u Choose a discount rate –opportunity rate on alternative –risk adjusted u Calculate present value and net present value and decide if worth more than costs

3. J. K. Dietrich - FBE 532 – Spring 2006 Updated Estimates in Valuation

4. J. K. Dietrich - FBE 532 – Spring 2006 Sensitivity to Operating Ratios

5. J. K. Dietrich - FBE 532 – Spring 2006 Eskimo Pie Cost of Capital Estimated WACC using short-term and long-term Treasuries:

6. J. K. Dietrich - FBE 532 – Spring 2006 Valuations under Varying Rates Assuming $4.4 million assumed in the case FCF ($4 +.4) grows in perpetuity and omits $13 million in excess cash available for payment to buyers

7. J. K. Dietrich - FBE 532 – Spring 2006 Valuation Using Comparables

8. J. K. Dietrich - FBE 532 – Spring 2006 Eskimo Pie Share Price 1992-99

9. J. K. Dietrich - FBE 532 – Spring 2006 Post-IPO Performance of Eskimo

10. J. K. Dietrich - FBE 532 – Spring 2006 End of the Eskimo Pie Story On November 17, 1998, an unsolicited offer from Yogen Fruz World-Wide Incorporated to acquire 100% of Eskimo Pie for $10.25 per share was rejected by Eskimo Pie’s Board. Yogen Fruz responded with a $13 conditional offer on December 2, 1998, and the Board requested its financial advisors to examine the “full range of strategies to enhance shareholder value” (p. 13, 1998 Annual Report). On May 3, 2000, the company agreed to be acquired by Cool Brands, Yogen Fruz’ successor, for $10.25 per share. Shareholders accepted the offer on September 6.