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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (42663)	4/2/2001 5:25:11 PM
From: Prognosticator	Read Replies (2) \| Respond to of 64865

I'm interested in your calculation of $4.80 for future earnings: with interest rates at 5.5, and assuming no growth, I calculate $6.54 based on an estimate of $.36. Add in 13% sales growth, assume margins stay put (5.5% interest rate == PE of 18 as parity), add 13 for the controversial PEG = 1, times .36 is $11.22, add in book value of $3.13 and you get $14.35, a little below todays price but pretty damn close. And fed funds interest rates are currently at 5% and dropping, so your interest rate is too high, and 13% sales growth seems low, especially if you extend your view to 2 years out. How are you coming up with your numbers? What is your assumed risk premium? P.