Fannie Mae (FNMA)

[Red Captain]

For some reason my post did not link to your original that i was referring to. I quote you here:

"$12.31b Earnings * 14PE = $172.34b Market Cap
$12 pps * 5.893b sh. out. = $70.716b
($172.34b - $70.71b) - $19.13b = $82.49 Recap
$82.49b / $12 pps = 6.874b additional shares required
6.874b additional shares + 5.893b current shares = 12.767b total shares required

$172.43b - $19.13b Jr. Pfd = $153.30b Market Cap attributable to commons
$153.30b / 12.767b total shares = $12 pps attributable to commons.
Add back $19.13b for Jr. Pfd's and you arrive at total Market Cap of $172.34 for the entire business."

Line 2 is where the implicit assumption of 12$ per share is.

Now, I my post was just describing the relationship between the variables. I can put in a general form:

(Net Earnings)*(Price per earnings ratio)*(1/(# Shares Outstanding + # Shares From Warrant Exercised + # Shares From Recapitalization)) = Price Per Share

Since every variable save for price per share and # of shares from recapitalization are more less known estimates, the result is a function between the former two.

Perhaps another variable that could be added (deducted from net earnings in the bracket is dividends to preffered shares)