GREY:MAAFF - Post by User
Post by
mtsuiton Oct 22, 2008 7:09am
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Post# 15539636
RBC says wood and power worth $0.75
RBC says wood and power worth $0.75• Target Price Decreased from C$5.00 to C$0.75. In light of the challengingequity and credit market conditions, we reduced our target price for
MagIndustries from C$5.00 to C$0.75. The change reflects our decision to treat
the company's proposed potash project as a free option rather than the primary
driver of the company's value. The key near-term hurdle for the $1 billion
potash project is raising the equity and debt financing required for its
development. Our new target price largely reflects our valuation of the existing
forestry and power businesses based on a DCF approach assuming an
unlevered equity discount rate of 20%.