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To: Fundamentls who wrote (515)	8/26/2000 5:31:07 PM
From: Jon Khymn	Read Replies (1) \| Respond to of 19633

Man that boy Tiger is unreal. 8 iron approach shot in par 5? I think he is from the other planet just pretending to be a human.... OK, back to KREM. Forget 100% earning increase every year. But let's assume 25% increase every year for next 10 years. (Let's start with current EPS as $1.00 - So Year 2 will be 1.25 and year 3 will be 1.56, year 4 = 1.95 and so on...) 1. Do you think 25% earning increase in next 10 years to be reasonable? 2. If so what discount rate would you use for time value? 3. Do we need other variables? 4. Plug in above numbers, what do you get current KREM stock price?

To: Fundamentls who wrote (515)	8/26/2000 10:06:39 PM
From: Jon Khymn	Read Replies (2) \| Respond to of 19633

Year 25% 30% 50% 100% - 1.00 1.00 1.00 1.00 1 1.25 1.30 1.50 2.00 2 1.56 1.69 2.25 4.00 3 1.95 2.20 3.38 8.00 4 2.44 2.86 5.06 16.00 5 3.05 3.71 7.59 32.00 6 3.81 4.83 11.39 64.00 7 4.77 6.27 17.09 128.00 8 5.96 8.16 25.63 256.00 9 7.45 10.60 38.44 512.00 10 9.31 13.79 57.67 1,024.00 p/e 20 186 276 1,153 20,480 p/e 30 279 414 1,730 30,720 p/e 40 373 551 2,307 40,960 (Discounting @10% interest rate) PV 72 106 444 7,877 PV 107 159 665 11,815 PV 143 212 887 15,754 Fundy, I made a simple chart. If KREM's earning to grow 25% every year, 10 years later, EPS will be 9.31. If we say P/E of 20 then stock price should be $186, and P/E @ 30 = $279, P/E @40 = $373. If we discount Future value of $186, @10%/year, Present Value (PV) should be $72. And if the growth of 30% at P/E of 30, the future stock price would be $414, and PV to be $159. They need to grow their earnings at about 100% per year forever to justify their current market cap Just for fun I added 100% growth every year. And guess what, if KREM can grow like this for next 10 years, earnings will be whopping $1,024/shr. And even with P/E of 20, the stock would fetch $20,480 in year 2010! (PV of $7,877!) LOL KREM looks dirt cheap at $80, ain't it? g (The above chart is novice working with simplified version. I would appreciate any financial pros out there to correct mistakes)