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Biotech / Medical : SANGUINE CORP. (SGNC)

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To: Mr. Forthright who wrote (2485)7/3/1998 2:33:00 PM
From: dwlima  Read Replies (5) of 5402
 
it is incorrect to discount future earnings. earnings contain non-cash items, such as depreciation. i have never seen a valuation that discounts future earnings. valuations (from a conceptual perspective, are simple. look at each years cashflows (cash in - cash out) and discount future years cash-flows with the appropriate risk-adjusted discount rate.

earnings does NOT equal cash. this would be a grave mistake in my professional opinion to perform a valuation in this manner

dwlima
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