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Note: The present value of $4080 is found by discounting four periods, not ve periods, because the stock price was found at the end of year 4 3 Ratio analysis A Price/earnings (1) The price/earnings (P/E) ratio (earnings multiplier) is used to determine the value of a stock The earnings multiplier tells an investor the price being paid for each $1 of earnings For example, a stock earning $5 per share with a 15 P/E means an investor is willing to pay $75 a share for the stock (2) The expected earnings multiplier is used to value a stock by estimating earnings for the next 12 months The equation becomes: E1 P0 P0 Current market price E1 (3) The P/E ratio is really just a reinstatement of the dividend discount model The rm s dividend is related to earnings and the proportion distributed In dividing both sides of the formula by expected earnings for the next 12 months, E1, the result is P0 E1 D1 E1 k g



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Unlike earlier chapters, with their sections on scalability and performance hints, this chapter contains a section devoted to scalability and performance challenges The reason behind this is simple: Web services are a new aspect of Internet technology and many of their standards and implementations are in flux Notwithstanding, we can step back and look at the general process of defining and using a Web service and identify parts of this process that may have scalability and performance implications

(b) The previous formula shows that a P/E ratio depends on the same factors to value a stock as those achieved through the use of the dividend discount model The factors





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Just as we were concerned about load-balancing Java servlets, we need to realize that Web services require a way to replicate and load-balance remote functionality This is definitely one area where embracing a component infrastructure technology such as J2EE can be a tremendous asset As we discussed in 3, J2EE implementations enable new instances of component functionality to be pooled and allocated quickly, with minimal resource demands The container abstraction in the design of J2EE lets developers worry about function implementation, not function distribution and scaling Thus, replicating provider functions for J2EE-based deployments is no longer as concern for the application architect and developer The only real work to be done is to load-balance Web requests across a set of machines running EJB containers that manage the functionality in demand

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An ef cient method for computing this weighted sum was originally proposed by Viterbi [6] for convolutional codes transmitted over the AWGN channel and is referred to as the transfer function bound approach. To apply this approach one must be able to write P x x in a product form where the nth term of the product is associated with the nth branch of the particular path through the state diagram de ned by the error event. Also, evaluation of this nth term must depend only on the distance between the nth branch of the correct and incorrect sequences and not on the distance properties of the entire sequence. Alternatively, one can write P x x in the form of an integral whose integrand is a product of terms satisfying the above-mentioned condition. In this case, it is possible to evaluate the TUB on average BER by rst applying the transfer function bound approach to the integrand (conditioned on the integration variable) and then performing the required integration. For trellis codes, we have seen that the appropriate distance measure is Euclidean distance and thus for the AWGN channel P x x would take the form [see (13.20), omitting the averaging on the fading]9 P (x x) = 1

In short, the replication and load-balancing demands of Web services are no different from the replication and load-balancing demands on servlets and EJBs To meet those demands, J2EE is designed from the ground up

152 - Investment Planning include (1) the dividend payout ratio (dividend divided by earnings, D/E), (2) the required rate of return (k), and (3) the expected growth rate of dividends (g) Advantage: P/E ratio can be applied to stocks that are not paying cash dividends The dividend discount model assumes the rm is paying or is going to pay a cash dividend Disadvantage: P/E ratio does not tell whether a stock is overvalued or undervalued to its market price Investors are required to draw inferences to historical P/E ratios in determining if the P/E ratio is high or low The dividend discount model allows for comparison to determine whether a stock is overvalued or undervalued to its actual price The estimated value of a stock can be determined by using the P/E ratio and applying it to estimated earnings for the next year (E1) Example: A rm has an expected payout ratio of 50 percent, a required rate of return of 11 percent, and an expected dividend growth rate of 6 percent Earnings for the current year (E0) are $200 The future earnings multiplier is computed as (a) P/Efuture ratio

In telling it straight Tuomas discloses his dilemma about what t o do when he does not fully embrace the perspective on interpretation the teacher is advocating. He characterizes this as a dangerous situation, although he does not expand on the potential losses o r risks inherent in it. If he plays according t o his own interpretation, it is deemed not right . It is an uncomfortable situation. Tuomas suggests that t o play how another person wishes involves deception and perhaps a betrayal of one s own self - it is the biggest possible deception that can exist. He struggles towards understandingthe rationale for the teacher s advocacy of his particular stance and uses the archaeological metaphor of having t o uncover, through digging out , the reasons underpinning the interpretation that his teacher is advocating. [...I Tuomas struggles t o give voice t o his own interpretations. However, his own creative interpretations are in direct conflict with the guidance beinggiven by the teacher who is working with the student within the framework afforded by a particular system of assessment carrying the weight of historical tradition, oriented t o the forms of expression valued by an established classical music community. T o adhere unquestioningly t o these valued forms of expression is somehow considered by Tuomas t o be dishonest-and creates a situation in which inherent in the simple, unquestioningadoption of an interpretation, is the risk of taking on a troubled identity.

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