VTG valuation guesswork, page-154

I have done my own valuation today based on the 10% remuneration reductions over the next few years. Based on average sales growth of 3%pa, expenses increase of 1.5%pa (or half of sales growth rate), COGS at 90% of sales, consistent D&A of $11m pa, $800k interest expense pa and the company paying out 70% of FCF as dividends. After FY19/20, I have factored in no further REM cuts.

Taking this into consideration, I value shares of the company for the following discount rates as:
15%.....$0.55
12%.....$0.68
10%.....$0.83
8%......$1.13
6%......$1.89

Hopefully Maxine and management can get a better REM deal with Telstra, for example, maybe 5% reduction over 6 years. That would take the 10% return to $1.05. Obviously a long way from where we were, though...