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Pastimes : Starbucks SBUX

SBUX 89.97

+1.2%

Jan 12 3:59 PM EST

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To: SONAR who wrote (68)	8/24/1996 6:28:00 PM
From: Sturgeon	of 148

Here's a short quiz to test your investment skill: Question #1. Because Starbucks has ROE of 10% they can't grow faster than 10% without constantly selling shares to the public. (True or False?) Question #2. If Starbucks traded at a low p/e, such as 15, selling shares to finance growth could never result in rapid growth in per share earnings because of dilution (True or False?) Question #3. People would not buy SBUX at 60 p/e if they didn't expect years of rapid growth in per share earnings (True or False?). Question #4. If people only pay 60 p/e because they expect fast growth and if Starbucks can only grow fast because they issue shares at 60 p/e then why am I the only person here that can see this is a pyramid scheme?

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