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Technology Stocks : All About Sun Microsystems

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To: Prognosticator who wrote (42664)4/3/2001 12:40:21 PM
From: Wayners  Read Replies (1) of 64865
 
Value=TSE/Diluted Sh + (EPS*(1+g)^7)*(((1+i)^7)-1)/(i*(1+i)^7))

TSE is total shareholder equity
Dilute Sh is the diluted number of shares outstanding (of course thats always growing and should probably be taken into account)
EPS is the estimate for the next 4 quarters
i is the interest for the payback period
7 is what I used for 7 in years as the payback period
g is the geometric growth rate, i.e. each earnings is some percentage higher than the previous years

the (1+g)^n is the compound growth factor which is the same thing as the single payment compound amount factor except the i% is replaced by the g%. That gives you the equivalent uniform annual payment A for the geomtric growth. The last factor is used to convert the A to a present value. The last factor is the uniform seris present worth factor P/A.
The
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