share valuation, page-7

Using a forward 4 year PE ratio is done to find the end valuation.

However at this stage BND has no finance (and uncertain financing means) then you probably only attribute a 30% of the forward valuation so that $2.18 is really equate to 65.4cents. If you add all their other assets you can say that BND forward PE valuation could imply $3. But if you take 30% of this then its back to 90c.

If you discount by a risk rate of 10% then its 59.45cents( basing on 65.4cents) or 81.82cents (if you base it on 90cents)

Once there are things resolved and the company gets a move on then you can say that the next stage is 50% of the forward valuation (if there is dilution then you can see that share price will not increase to the same increment).

I agree with Valinvestor that $15m depreciation is unrealistic.

BND was successful in selling the story of 'takeover' to the market so all the forward PE became more realistic. Now the market realises that BND is not getting takeover bid its going back on its conservative valuation.

If the investor is so certain that this thing is worth North of $2 then load on ... why don't you leverage your house and buy this stock.