Continued from Part 1 First, some background details regarding modeling assumptions and historical financials:Approximately 90% of Google's revenues come via its advertising services and 45%-50% of that is U.S. based. Additional revenue is generated from the sales of digital content, cloud storage offerings, smartphone apps, and branded hardware, including Chromebooks, Chromecast, and Nexus. Google reported a 17.3% growth in revenue for its 2016 Q1 reporting period over 2015 Q1. Its year-over-year revenue growth has never fallen below 10.3% within the past five years, and for that reason one could conservatively project it forward at 10% YOY. I believe this a relatively reasonable (and cautious) approximation based on Google's historical data and on the basis that Internet usage is still very much in a growth phase due to its continued expansion into developing economies.In terms of expense minutiae, traffic acquisition costs comprise the bulk of its operating expenses at 21%-22% (overall opex is 37%), R&D at 16%, sales and marketing at 12%, general and administrative at 9.5%, and stock-based compensation at 7.5%. G&A expense fell to 7.4% in the company's latest quarterly reporting period but due to a function of lower legal-related expense. The company's G&A expense is the most variable as a proportion of sales relative to other expenses, but will be conservatively estimated at its high range for purposes of this valuation.The company's EBITDA margin appears poised for a repeat around the 32%-33% mark for the FY2016. These past two years, Google's EBITDA margin has come in at 32.5% and has not fallen below 29.9% within the past five years. Depreciation expense is typically 8% of revenue, yielding EBIT and NOPAT margins of 25%-26% and 20%-21%, respectively. Given Google's strong market-leading position in the ad revenue space, I believe these margins are likely to be robust moving ahead.Google's capital expenditures are relatively high for a company of its focus at 10%-12% of revenue. The company's net change in operating assets/liabilities stands at roughly 4% of revenue. I apply a 20% effective tax rate to the company to reflect the average of the past five quarters.Because of its equity-heavy capital structure, Google's cost of capital is much higher than most other companies. With an implied 7% equity risk premium the company's cost of capital projects out to approximately 9%. I assume a perpetual growth rate, g, of 2.40% to emulate the long-term expected U.S. average.