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Politics : Ask Michael Burke

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To: MileHigh who wrote (61915)	6/10/1999 12:44:00 AM
From: Michael Bakunin	Read Replies (1) of 132070

Let's use a market multiple; that's probably too kind to a post-growth annuity. Assume the market remains high. At 30x the stock only gets to $120. Apply a discount rate. Given the risks, I think 20% is fair, even low. Your present value is... $83. I think it likely your share estimate is on the high end, and that to get there the company will probably have to cut royalties. Tweak the inputs a little and you can easily justify a share price in the twenties, even assuming some decent future successes. Say, 20x $2 earnings in three years instead of two.. and PV is $23. Really negative assumptions aren't necessary. -mb

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