1. Fisher College of Business – Student Investment Management Materials Stock Analysis By Joshua Carter & Kyle Shaner

2. Fisher College of Business – Student Investment Management Presentation Overview  Sector Recap  Sell Recommendation  Buy Recommendation  Recommendation Summary  New SIM Portfolio

3. Fisher College of Business – Student Investment Management Sector Recap Current SIM Weight = 1.79% Current S&P Weight = 3.04% Continue to Underweight by 1.25%

4. Fisher College of Business – Student Investment Management Sector Recap – Current Holdings Unit Cost Total Cost Market Price Market Value Unrealized Gain/(Loss) Loss $117.06$468,225.60$52.11 $208,440($259,785.60)(55.5)% Posco ADR (PKX)  South Korean steel manufacturer  Hot-rolled steel  Cold-rolled steel  Stainless steel

5. Fisher College of Business – Student Investment Management Sector Recap – Current Holdings… POSCO Notable News EventsGeographic SegmentsRevenue Segments Feb 2009 – 6% annual production cut Feb 2009 – Iron Ore miners increase price 5% Jan 2009 – CEO steps down after poor performance Feb 2009 – Cuts stainless steel prices 10% Dec 2008 – Announces 1 st ever production cut at 10%

6. Fisher College of Business – Student Investment Management Sector Recap – Current Holdings… Posco vs. S&P Valuation HighLowMeanCurrent ∆ From Mean Opinion P/Forward E0.760.120.340.6279.4%Overvalued P/S1.370.220.470.6640.4%Overvalued P/B0.740.130.310.4545.2%Overvalued P/EBITDA0.670.130.310.29-6.5%Fair Value P/CF0.770.160.310.3925.8%Overvalued P/E/G2.600.090.471.46211%Overvalued ROE1.800.420.921.0817.4%Overvalued Posco vs. Materials Valuation HighLowMeanCurrent ∆ From Mean Opinion P/Forward E0.900.150.350.4425.7%Overvalued P/S1.440.420.650.7616.9%Overvalued P/B0.710.280.360.4113.9%Overvalued P/EBITDA0.710.180.360.19-47.2%Undervalued P/CF0.810.250.450.486.7%Fair Value P/E/G2.380.120.401.10175%Overvalued ROE1.760.630.990.95-4.0%Fair Value

7. Fisher College of Business – Student Investment Management Sell Recommendation Faces Many Economic ChallengesGlobal Slowdown  Steel prices have fallen dramatically  Slowdown in global & domestic demand  Ailing auto industry  Increase in raw materials prices South Korean Slowdown

8. Fisher College of Business – Student Investment Management Sell Recommendation… Comparables Analysis As of March 2, 2009. Data provided by Yahoo Finance

9. Fisher College of Business – Student Investment Management Sell Recommendation… DCF AnalysisDCF Sensitivity Analysis

10. Fisher College of Business – Student Investment Management Sell Recommendation… Absolute ValuationComparables AnalysisBlended Multiples Price Target – Abs. & Comp

11. Fisher College of Business – Student Investment Management Sell Recommendation… EPS vs. Volume & Steel Price – Sensitivity AnalysisTarget EPSPrice Target

12. Fisher College of Business – Student Investment Management Conclusion SELL US$ 45.00 : Blended price target based on DCF EPS Sensitivity Analysis Comparable & Absolute Multiple Valuation

13. Fisher College of Business – Student Investment Management Buy Recommendation DOW Chemical  Engages in manufacture and sale of chemicals, plastic materials, agricultural, and other specialized products  2008 Revenues of $57,514 billion: 7.4% increase  Strong growth expected in agriculture segments Equity Trading Statistics Market Price % 52 Wk HiP / EMarket Cap09 EPS est.Beta $7.11(84.0%)11.52x$6.57 B$1.75/sh1.48

14. Fisher College of Business – Student Investment Management Buy Recommendation… Geographic SegmentsRevenue Segments Feb 2009 – Announces top executives won’t get cash bonuses March 2009 – S&P cuts two short-term ratings Jan 2009 – Rohm & Haas sues Dow Feb 2009 – Cuts dividend 64% to 15 cents a share Dec 2008 – Announces it will cut 11% of workforce

15. Fisher College of Business – Student Investment Management Buy Recommendation… Dow vs. S&P Valuation HighLowMeanCurrent ∆ From Mean Opinion P/Forward E4.560.580.851.2041.2%Overvalued P/S0.830.160.580.16-72.4%Undervalued P/B1.490.290.820.29-64.6%Undervalued P/EBITDA99.90+0.310.690.31-55.1%Undervalued P/CF1.190.270.630.27-57.1%Undervalued P/E/G6.880.591.421.34-5.6%Fair Value ROE1.840.230.930.58-37.6%Undervalued Dow vs. Materials Valuation HighLowMeanCurrent ∆ From Mean Opinion P/Forward E4.000.680.900.87-3.3%Fair Value P/S1.070.290.870.19-78.2%Undervalued P/B1.580.261.090.26-76.1%Undervalued P/EBITDA99.90+0.200.740.20-73.0%Undervalued P/CF1.470.330.940.33-64.9%Undervalued P/E/G5.080.681.231.00-18.7%Undervalued ROE1.720.341.090.54-50.5%Undervalued

16. Fisher College of Business – Student Investment Management  Infrastructure spending plays to strengths  Consumer spending is key  Product and geographic diversification  Decline in oil prices Buy Recommendation… An Industry Bright SpotUS - 2009 Economic OutlookEconomic Stimulus

17. Fisher College of Business – Student Investment Management Buy Recommendation… DOW Acquisition of Rohm & Haas ~$15 billion Deeper Reach in Developing Markets – Asia / Pacific 2007 – 2012E CAGR Financing Mix  $3 billion preferred equity investment from ROH Investors  Draw $10 billion from bank loan  Receive $4 billion from Berkshire and KIA  Divest $4 billion in ROH assets Strategic Rationale  Grow performance and specialty chemicals  Strengthens competitiveness of basic chemicals  $1.3 billion in synergies  30% of synergies come from purchasing of raw materials  $2.6 billion in additional value creation  $1.7 billion combined in R&D  Delivers more stable earnings with higher growth Dilution / Accretion -10%-5%0%5% EPS $ 0.52 $ 0.58 $ 0.61 $ 0.64 $ 0.67 Stock Price $ 8.61 $ 9.56 $ 10.07 $ 10.57 $ 11.10 16.5x EPS Dilution / Accretion

18. Fisher College of Business – Student Investment Management Buy Recommendation… Absolute Valuation (50% mean reversion) Dow Chemical Absolute Valuation HighLowMeanCurrent #Your Target Multiple *Your Target E, S, B, etc/Share Your Target Price (F x G) A.B.C.D.E.F.G.H. P/Forward E99.9+8.817.714.88.850.61$5.40 P/S1.620.120.990.120.49554.6$27.03 P/B4.80.52.90.51.4514.12$20.47 P/EBITDA99.9+1.65.21.62.64.41$11.47 P/CF15.41.89.31.84.653.92$18.23 P/E/G8.60.71.91.60.954.4$4.18 ROE31.13.216.78.08.350.88$7.35 Average$13.45 Average Comparables Analysis Multiples Price Target – Blended Abs. & Comp 2009E EPSMultiplePrice $0.6116.5x$10.07

19. Fisher College of Business – Student Investment Management Buy Recommendation… Discounted Cash Flow AnalysisDCF Sensitivity Analysis

20. Fisher College of Business – Student Investment Management Buy Recommendation… Price Target Summary US$ 12.00 : Blended price target based on DCF Comparable & Absolute Multiple Valuation

21. Fisher College of Business – Student Investment Management New SIM Holdings SELL POSCO AND BUY DOW Conclusion: Continue to hold underweight Why not increase underweight? – Don’t want to miss an early economic rebound Why not reduce underweight? – Basic materials as a whole still out of favor SELL all of Posco holdings BUY 125 bps of DOW Chemical

22. Fisher College of Business – Student Investment Management Supplement Supplement: Key Economic Indicators

23. Fisher College of Business – Student Investment Management Supplement Supplement: Key Economic Indicators

24. Fisher College of Business – Student Investment Management Possible Dilution from Merger Supplement  Company project possible dilution of 5% Dilution / Accretion -10%-5%0%5% EPS $ 0.52 $ 0.58 $ 0.61 $ 0.64 $ 0.67 Stock Price $ 8.61 $ 9.56 $ 10.07 $ 10.57 $ 11.10 16.5x