as i said in other thread, i didn’t have access to my password over weekend, so could only look at this forum and not contribute. anyhow, pretty bad question… if BV is 25 in 5 years and it is worth 40% premium, why not just discount this $35 fair value for the 5 years? says nothing about payouts in-between? and then if you discount the $35 and added it to value of first 4 year’s earnings (i don’t agree as earnings are already in the $35 with no payouts), you get a very large number? i don’t see any reference to terminal value. i guess book value is terminal value, but if you weren’t paying dividends, then the 1-5 year earnings are in the book value. and i don’t see the rationale for discounting only the $10 premium to book. also, how did the book value get from $9.50 to $25 in 5 years? anyhow, i’m inclined to say horrible question… but really, who’s surprised??