The reason why you are willing to pay a higher Price to

And actually, this guy, even if the top line, even if the revenue grew the same and the operating profit grew the same, because of his leverage he would actually grow a

And you're going to pay a lower Price to Earnings ratio if the company isn't growing.

So a plus b have to be equal to 50.

But if you look here, by giving the same price to earnings, because they're the same business.

Profitable.

Invest financial assistance, but also management assistance.

And we can eyeball it right here.

Maybe Abby made 50 and Ben earned 0.

Because when someone says earnings, are those the earnings last year?

And what's left over for the equity?

The earnings I just said, this is actually what happened to the company.

So let's look at them over the course of one year.

So notice.

Everything on this line would be a valid combination of

Abby earned 10 more than Ben.

And why don't you like them as much?

So the price would be 100.

Another type of revenue model is licensing.

So let me switch colors just to ease the monotony.

And they were male and female 18 30 and they were casual fans.

And the first one is that this whole idea about revenue stream, Steve, I get it.

But it might be to explicitly control the yield curve further out, so that the borrowing cost for longer debt goes down, so that the yield curve looks something like that.

What does that tell us?

It's just a faster way of saying

So now we add an interesting line.

We expect rapid growth of the utilities sector.

This is really important to pay attention to, because so many people say, oh, a company made this much.

No 'new' money is added on top.

And we add back the interest, at least in this example, we get to an operating profit number.

We are assuming a very simple world, were the is no taxes, we have no debt, we have no intrest or things

And so I'm left with net income of 350,000.

But I just want to give you the gist of what's happening.

They're going to make 0.35 in 2009 as well.

And that's because they have the same exact asset.

Let's compare EBlT to operating profit.

It's time to monetise the thing.

And how they were going to create demand was through search ads, social media, stadium promotions.

And if anything, this guy's growing a little bit faster because he's got that leverage, that extra juice from the financials, from the capital structure he's got.

We talked about the potential ways to charge

The return on the investment will be high.

So you say, they both deserve a price to earnings of 10.

Instead we could say that file sharing is good.

We learned that in our first video.

In this case, we use last year's earnings.