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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: Berney who wrote (404)6/18/1998 9:15:00 AM
From: Daniel Chisholm  Read Replies (1) of 1722
 
Why not calculate total Price (sum of market caps), and divide it by total earnings? This would give a composite P/E of a mythical merged company.

This of course ignores how "true" (i.e., meaningful) the reported earnings are, as well as any favorable or unfavorable consequences to earnings that could have been realized had the companies actually been combined.

But it is simple, mechanical and does not discard any data. It would be interesting to see what the results are....

- Daniel
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