Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (37352)	11/23/1998 5:41:00 PM
From: MythMan	Read Replies (1) \| Respond to of 132070

can't argue with ebay.. sickso only has p/e of 80. what is the problem? Don't you think that some co isn't going to make a cash tender offer for sickso at market cap of 100Billion? -g-

To: Knighty Tin who wrote (37352)	11/23/1998 11:25:00 PM
From: Richard Nehrboss	Read Replies (1) \| Respond to of 132070

Mike, et al... Need a hand here. When looking at valuation from a net present value of discounted cash flows, I have a problem. Let's take an example that has been tossed out on the Buffet thread. Let's assume (only if all the Chinese start drinking soda) that KO can grow 15% for ten years and then 5% thereafter. If we use a dollar (just as a baseline to come up with a PE) as this years earnings, excel spits out a 15 year NPV (with a 9% discount rate) of $21.24. What I don't understand, is after 10 years, the NPV is $13.59. For years 11-15 at 5% which is less than the discount rate, shouldn't it go down? When I extend this (which I believe you're supposed to do) out for many many years, we approach a npv of dis. cash flow of $58 and change. If the above were totally accurate (which they aren't), is this correct simple methodology? Thanks Richard