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Technology Stocks : All About Sun Microsystems

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To: cfimx who wrote (10251)6/29/1998 2:20:00 PM
From: Cengiz Erbas  Read Replies (1) of 64865
 
> i gave you my assumptions for msft. 20% eps growth and 25 p/e
> at end of ten years.


O.K. but based on which assumption the company will deserve a P/E=25 in year 2008?

P/E is a derived variable. You cannot assume a derived variable; but you predict a derived variable based on your assumptions on component variables. You already make those assumptions, when you predict a P/E=25 by the year 2008. Write down those assumptions and see how ridiculous your arguments are!

You are not the first person in this planet who tries to justify a P/E=60 with a 20% annual growth rate! :-))

Cengiz.
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