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Technology Stocks : Dell Technologies Inc.
DELL 122.46-8.5%Nov 17 3:59 PM EST

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To: GrahamnDodds who wrote (50625)7/10/1998 1:59:00 PM
From: Chuzzlewit  Read Replies (1) of 176387
 
Whoops! you just pushed all of my hot buttons. VALUE!!!

Tell me please, how you assign a dollar value to a growth company. Presumably, the value of a company is calculated as the present value of the future cash flows discounted at a suitable risk-adjusted discount rate. The risk, of course, should be defined in terms of the risk free rate of return plus the appropriate measure of the riskiness of the forecasted cash flows. For this purpose the standard deviation is generally used.

Now I know of no such model that is adequate for multiperiod growth. I would love to see a good model that adequately captures the concept of value.

It's also interesting to note that most economists agree that value of an object is defined by what a willing buyer and willing seller agree is the value of that object by trading.

Tell me please, what is a bottle of ketchup worth? How do you know?

You are a classic Ursa itaintworthitensis

TTFN,
CTC
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