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Pastimes : Ask da_cheif -- Ignore unavailable to you. Want to Upgrade?


To: William H Huebl who wrote (6564)10/30/2001 5:37:22 AM
From: Moominoid  Read Replies (1) | Respond to of 8150
 
Somewhere I was reading that the way to value stocks in practice is to think of them as a combination of a bond and an option. The bond is on the current earnings projected forward and the option on the growth component. No earnings and a stock would be valued more like an option. No growth and it would behave more like a bond. This might not be perfect but it seems closer to reality than does DCF and CAPM.