Buy Good Value and/or What Other People will Like?

[Evan]

I am sort of swamped, but I'll try to give a quick answer to your questions.

Basically they're moving from mainly produing herbicides to mainly producing genetically altered seeds, which is MUCH higher margin. In 2010 they are releasing a corn seed that can grow without irrigation and yield 36 bushels/year on infertile land. There are other products in the pipeline (all in stage 2 or 3 development), but that's the big one. That accounts for growth and margins.

the cost of equity took the average unlevered beta for the something chemicals industry (I forget the exact name) and levered it for their debt levels. That turend out to be pretty low so we bumped it up 15% on top of that.

I'll come back alter and write some more in depth explanations.

EDIT: As for some of the EBIT differences, my roommate worked on most of that part so I don't have any dfinite answers for you. I know that we adjusted their GAPP reported figures somewhat to account for what we felt was a more accurate forward-looking picture of the company. This is pretty common.

One more edit: I kind of brushed over that whole corn grwoing without water thing, but that is a BIG BIG BIG deal. The grwoth rate in 2010 of 30% seems high, but a more realistic number is probably 230%.