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Non-Tech : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: Rational who wrote (53009)	4/18/1998 3:06:00 PM
From: RetiredNow	Respond to of 58324

Sankar, I didn't say it was the ONLY formula. Jeez, don't you guys read. I said it is ONE tool you can use. No shit it is a constant growth formula. That is why it cannot be used as an absolute. What would be a better way to calculate price is to factor in short term astronomic growth rates and then calculate a discounted terminal value based on more conservative mature growth rates and add that to the results of the super normal growth model to come up with a price. But if we get too complicated, most of the people here would not understand what you or I are saying. As far as being rude, that's the pot calling the kettle black. This is the rudest thread on all of SI. That rude message of mine was the first rude message I've posted on this thread and it was in response to a rude message. Instead of calling all my assumptions wrong, give me a rejoinder. I'd love to evaluate your own assumptions and correct mine where they are needed. But first we'd have to dig deeper on the cost of capital issue by looking for some comparable firms, and taking into account capital structure, come up with viable Betas. Then we could use CAPM or Modigliani and Miller's formula to come up with cost of capital. Only then would we have a more accurate valuation model. As far as assumptions not being clearly known, you are correct. That is why they are called estimates. But wouldn't you rather rely on analyst estimates than on gut feelings or emotions? You tell me.