Investment: Ecowise

Using FY06 financials and $0.72 before the rights issue, the following are the calculations

Price/Earning per share 15.01
Return on Equity 21.27%
Price/Book per share 5.186
Debt to Equity 0.62411
Price/Cash Per share 12.6801
Current Ratio 1.90110
Quick Ratio 1.81740
Dividend Yield 6.25%
Net Current Asset per share $0.1350

The carbon credit sale will provide Ecowise with an income of roughly $1,596,000 (using $16.80) and this will not affect FY07 financials as stated in the papers.

Thus i am giving Ecowise an instrinsic value of $0.60 after the warrant effect. Due to the good ROE and an additional source of income through the Carbon Credit sale. instrinsic value is calculated using DCF and DEPS.