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To: Ilaine who wrote (1902)7/3/2000 3:58:21 PM
From: pater tenebrarum  Respond to of 436258
 
yes, if you use the corporate bond rate for discounting, the stock market is even more overvalued. the overvaluation according to the Fed model, based on 10-year note yields and I/B/E/S forward earnings estimates (which are inflated through recent experience) is about 50%. using double A rated corporate bonds the fair value for the S&P is probably around 600 points or so.