1. Dover Corporation Presented by Greysi Burroughs Rena Huynh Helen Tse

2. Agenda  Company Overview – Rena  Financial Statement Analysis – Greysi  Firm Riskiness – Helen  Beta – Helen  Cost of Equity – Rena  Firm Valuation  Discount Dividend Model (DDM) – Greysi  Free Cash Flow Model (FCFM) – Helen  Multiples (P/E ratio) – Rena  Final Valuation and Recommendations – Greysi

3. Company Overview Brief History  Founded: 1955  HQ: Downers Grove, Illinois  Diversified Global Manufacturer  Volume: > $8 Billion  Exchange: NYSE under “DOV”

4. Company Overview 4 Major Operating Segments  Industry-leading product innovation Providing innovative products & solutions that serve drilling, production and downstream markets 1. Global pump & fluid handling markets 2. Refrigeration systems Provides integrated printing, coding, identification equipment Provide acoustic components for consumer electric markets *serves life sciences, aerospace, & telecom markets

5. Financial Statement Analysis Liquidity Ratios Dover Corp.201120102009Industry Current Ratio2.82x2.73x2.60x1.2x Quick Ratio2.16x 2.01x0.9x Asset Management Ratios Dover Corp.201120102009Industry Inventory Turnover 9.9x10.09x9.36x5.8x Day Sales Outstanding 55 days56 days60 daysN/A Fixed Asset Turnover 7.94x8.45x6.45xN/A Total Asset Turnover 0.84x0.76x0.68x0.6x

6. Profitability Ratios Market Value Ratios Debt Management Ratios Dover Corp.201120102009Industry Total Debt48%47%48%N/A Interest Coverage10.47x9.48x5.88x6.8x Dover Corp.201120102009Industry Profit Margin11.26%10.54%6.67%8.79% Return on Assets9.42%8.18%4.52%5.1% Return on Equity18.16%15.47%8.73%14.67% Dover Corp.201120102009Industry Price Earnings11.72x14.86x20.3x21x Market to Book2.13x2.3x1.77x2.55x Financial Statement Analysis

7. Firm Riskiness  Economic conditions and uncertainties  Competitive environment  Advanced technology  Increased price/unavailability of raw materials  Litigations  Foreign operations

8. Beta  Dover’s computed beta: 1.4  (Yahoo Finance) Dover beta: 1.5  Our beta will be used in the Capital Asset Pricing Model that will help calculate the expected return of Dover.

9. Cost of Equity

10. Valuation: Dividend Discount Model Assumptions  Non-constant growth rate: 12.8%  Constant growth rate: 5.5%  Cost of equity: 9.89% Valuation for December 2011: $50.45 Stock Price as of 12/31/11: $56.51 per share

11. Valuation: FCFM Assumptions  Based on past 3 years (2011, 2010, 2009)  Created pro forma financial statement for next 10 years  Forecasted unlevered free cash flow  Dover’s value was estimated to be $244.25 per share  In comparison to $56.51 per share on December 2011

12. Valuation: Multiples Stock Price as of 12/31/11: $56.51 per share  Method 1:  Valuation = $54.04  Method 2:  Valuation = $65.14  Method 3:  Valuation = $140.32

13. Final Valuation Estimate and Recommendation Dover’s value estimate for 12/11 is $56.54 per share  Stock price on 12/31/11 was $56.51 per share Average of – DDM: $50.45 per share – Valuation by Multiples Method 1: $54.04 per share – Method 2: $65.14 per share Recommendation: BUY!!!

14. Questions???