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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (61273)	9/4/2018 5:37:39 PM
From: William Cloutier	1 Recommendation Recommended By Jurgis Bekepuris Read Replies (1) \| Respond to of 78777

Let's try $ 1 000 in pretax earning (per share or not isn't making a difference here) the same pretax earnings for 10 years (I don't think growth is also making a difference in my demo) Long term Corporate Bond Rate for the year: 4 % or 0,04 A) Discounting for 10 years ($ 1 000 X (1-(1,04^-10))) / 0,04 = $ 8 110,90 B) Your formula $ 1 000 / 0,04 = $ 25 000 B) Discounting for 200 years ($ 1 000 X (1-(1,04^-200))) / 0,04 = $ 24 990,20 3,8 or 4 % is making a bigger difference for your formula than for 10 years. If we use 3,8 we get A) a difference of $ 81,36 or 1 % higher B) a difference of $ 1 315,80 or 5,26 % higher I'm sure we are arguing on insignificant details but maybe we can learn something. Good Investing WIll