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From: jackson@curium.DEC (SETH JACKSON 297-4751)
Newsgroups: net.invest
Subject: Re: Stock market a present value machine
Message-ID: <1738@decwrl.DEC.COM>
Date: Mon, 17-Mar-86 18:48:21 EST
Article-I.D.: decwrl.1738
Posted: Mon Mar 17 18:48:21 1986
Date-Received: Wed, 19-Mar-86 01:11:46 EST
Sender: daemon@decwrl.DEC.COM
Organization: Digital Equipment Corporation
Lines: 16


>Someone mentioned that the stock market is just a present value machine
>This can't be totally true, because then every stock with a given P/E
>ratio would sell at exactly the same price, right?  A quick glance
>at the stock listings shows this not to be the case.  Comments?
>
>	Jeff Percival ...!uwvax!uwmacc!jwp

Wrong. The price of a share of stock is the net present value of the
company divided by the number of shares outstanding. Even if two
companies had the same net present value (highly unlikely), their
share prices would differ if they had a different number of shares
outstanding.
--
			Seth Jackson