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Subject:  Evaluating a Stock with a "Higher" Mul Date:  7/20/2008  1:32 PM
Author:  PennyPincher12 Number:  3664 of 3816

I don't mean high multiplier as in 40 and up. I mean in the high teens, maybe 20 or so.

If you look at stocks that have great business futures like Coca-Cola and Yum! Brands and use the current purchase prices and a conservative projection of future earning power you will find that you will make more money in a 10 year period just by buying a AA corporate bond.

However, sometimes many investors are able to buy Coke and Yum or something along those lines for as much as 25 times earnings. And the general consensus here is that these companies are some of the best to invest in.

How do you justify a purchase like this if the bond will earn more money?
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