Willamette’s book value at the time of acquisition
Essentially, book value refers to the total value of assets less the value of liabilities. With 110 million shares outstanding going for $55.5 per share, the company had $6.105 billion. Out of this, the company owed $1.7 billion to Weyerhaeuser (although Weyerhaeuser did forgo that debt as part of the deal). The book value is $6.105 minus $1.7 billion. That comes to $4.405 billion.
Willamette’s value: DCF Model
The DCF (discounted cash flow) model takes into consideration the money the company is likely to make in the future.
Willamette’s market capitalization at the time of sale
Essentially, market capitalization refers to the Continue reading...