SGE

Couple of things...first. wouldn't all your estimates have to be reduced by almost half due to taxes...PE being based on net earnings that is...and second..I don't believe even with all you have proposed that we would ever see a 40 multiple with simple 10% return form investment,,,sorry but IMO not even close to a 40 multiple unless we "invest" our income  in a successful concern that gives us a 10% profit from ongoing operations...I'm not sure where your 10% return is coming from...could be you're using an acquisition that would do that. In that case your ten percent is doable but the 40 multiple. esp. with a "new" company  could be very high.

I agree with mvaar to the extent that all PE ratios are usually based on Expected earnings and an acqusition is what we need to get there...after a successful trial that is...JMHO