question archive Wilbur and Orville are brothers
Subject:AccountingPrice:2.87 Bought7
Wilbur and Orville are brothers.? They're both serious?investors, but they have different approaches to valuing stocks.?Wilbur, the older? brother, likes to use the dividend valuation model. Orville prefers the free cash flow to equity valuation model. As it turns? out, right? now, both of them are looking at the same stock—Wright First? Aerodynmaics, Inc.? (WFA). The company has been listed on the NYSE for over 50 years and is widely regarded as a? mature, rock-solid,?dividend-paying stock. The brothers have gathered the following information about? WFA's stock:
Current dividend (D0?)=$3.30?/share
Current free cash flow (FCF0?)=$1.0 million
Expected growth rate of dividends and cash flows ?(g?)=8?%
Required rate of return ?(r?)=16?%
Shares outstanding=500,000 shares
How would Wilbur and Orville each value this? stock?
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