What is the fair value of wft stock

Assignment Help Finance Basics
Reference no: EM132544518

West Fraser Timber Company (WFT) is expected to have free cash flow in the coming year of $2 million and its free cash flow is expected maintain at a sustainable growth rate of 4% per year. It has a debt worth $10 million. It's equity cost of capital is 12%, cost of debt before tax is 6%, and it pays a corporate tax rate of 30%. If WFT Company maintains a debt-equity ratio of 0.5 and the company has 3 million common shares outstanding, what is the fair value of WFT stock?

Reference no: EM132544518

Questions Cloud

What is the stocks geometric average return : A stock has monthly returns of -26.47%, -06.52%, 18.19%, and 32.45%.
Exchange rate at the end of the contract : How much does the investor gain or lose if the exchange rate at the end of the contract is ¥110/$1?
Implications and threats to financial intermediaries : Conduct a study on Block chain in Finance, current trends, implications and Threats to Financial Intermediaries.
What is the interest component of 25th repayment : What are monthly repayment? After two year, how much do you still owe bank? What is the interest component of 25th repayment?
What is the fair value of wft stock : West Fraser Timber Company (WFT) is expected to have free cash flow in the coming year of $2 million and its free cash flow is expected maintain
Modified duration of that 3-year annual coupon bond : My company asks me to manage a short-term guaranteed investment contract. My job is to issue portfolio that has a 4-year duration.
Compare the inventory conversion-average collection : You are required to download the financial statement of any firm of your choice in the "Textile" sector of Pakistan for the year 2019, and compute the cash
What rate of return is he expecting : ABC Co. and XYZ Co. are identical firms in all respects except for their capital structures. ABC is all-equity financed with $750,000 in stock. XYZ uses both
Monetary policies during covid-19 pandemics in malaysia : Give four (4) suggestions, what is the robust and suitable Monetary Policies during COVID - 19 pandemics in Malaysia?

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute the amount of the aftertax income

The treasurer of Harmon Bottling Corporation currently has $100,000 invested in preferred stock yielding 9 percent. He appreciates tax advantages of preferred stock and is planning buying $100,000 more with borrowed funds.

  Differentiate between the real risk free rate

Differentiate between the real risk free rate and the nominal risk free rate of interest. Which should be used when used to assign value or cost to an asset?

  Suggest the co the alternative that maximizes the eps of

a co.s present capital structure contain 10 00000 equity shares and 60000 preference shares. thefirms current ebit is

  What are the retained earn

In addition, the company had an interest expense of $4,256, and a tax rate of 43%. The company paid$9,026 as dividends. If the retained earnings is 2006 were $56,533, what are the retained earnings in 2007?

  Suggests that an investment in disney

Assume now that you are an active investor and that your research suggests that an investment in Disney will yield 12.5% a year for the next 5 years.

  Solving objective finance problems

Janice wants to send her parents on a cruise for their 25th anniversary. She has valued the cruise at $15,000 and she has five years to accumulate this money.

  What is the company''s inventory turnover ratio

Jason Traders has sales of $833,587, a gross profit margin of 32.4 percent, and inventory of $178,435. What is the company's inventory turnover ratio? Please show work!

  Calculate ear for first national bank and first united bank

Calculate the EAR for First National Bank and First United Bank.

  Compute macaulay and modi?ed durations

Compute Macaulay and modi?ed durations for the following bonds: a. a 5-year bond paying annual coupons of 3.322% and selling at par

  Percentage of this loss will the insurance company

a. How much insurance should they have carried to meet the coinsurance obligation? b. What percentage of this loss will the insurance company pay? c. How much of the loss will George and Nancy have to absorb?

  Components of balance sheet and the income statement

Please list the components of the balance sheet and the income statement. In addition, please explain how each financial statement differs and its focus.

  How do each of the three eggs placed in solution

1. Record your hypothesis from Step 15 here. Be sure to include scientific reasoning to support your predictions. 2. How do each of the three eggs placed

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd