one dollar today, page-30

komodoguy,

So ? You still know _nothing_ about value.

P/e has nothing to do with value.

You have two companies:

    Company "A" makes a NPAT of $2m.

    Company "B" also makes a NPAT of $2m.

    Company "A" issues 1,000,000 shares.

    Company "B" also issues 1,000,000 shares.

    Company "A" floats at $12.

    Company "B" floats at $24

    This means that Company "A" has a P/e of 6.

    And Company "B" a P/e of 12.

Wow ! Company "A" must be the CHEAPER buy !! Go for GOld.

Not !

Haha :)

You guys are hopeless.

What the hell does the P/e got to do with value ?

How do you know the IPO price isn't a ripoff for either company ?

Here's a hint:

    What's the cost of capital to make the profit ?

Go get a fcking clue.