why buy at 2.5c

I know I have said a number of times IMO 2.5c is a bargain.

Doing a little NPV calc on the options you will find that 2.5c can be summed up as:


1. Positive Annoucement = 12c
2. Negative Annoucement = 1.5c
3. Neutral Annoucement = 2.0c
ST risk free rate = 6.00%

Cynical view
Probability of 1. = 10%
Probability of 2. = 80%
Probability of 3. = 10%

NPV of shares = 2.45c

Optistic View
Probability of 1. = 70%
Probability of 2. = 10%
Probability of 3. = 20%


NPV of shares = 8.44c

Realistic View
Probability of 1. = 30%
Probability of 2. = 20%
Probability of 3. = 50%

NPV of shares = 4.62c

Based on this I assume peoples emotions are making there decisions and not their brains.

NOTE: This is just a guide, do not rely on it for any reason.