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Technology Stocks : Warren Buffett

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To: Murti Gajjala who wrote (32)1/6/1997 10:31:00 AM
From: shean bond   of 82
 
Murti,

Your s/sheet calculates the PV of a series. With respect to this I agree with the results. And your calculation would be appropriate for the first stage calc of Hagstrom's model. Although I don't follow your use of the inflation rate for the base discount rate in your calculation. The discount rate is usually an opportunity cost rate of one type or another.

What I am more interested in is the determination of an appropriate capitalisation rate, which is used in the second stage of Hagstrom's model.

Shean
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