> I don't know why you are trying to make this point about adjusting for risk when the entire question revolves around what the stock was worth at a stationary

> I don't know why you are trying to make this point about adjusting for risk when the entire question revolves around what the stock was worth at a stationary point in time three years ago. That you don't see how these two are connected is my point. Let me take a step back. The value of a company is the sum of the cash that can be taken out of the business in perpetuity discounted back to present value. A common mistake is thinking that you can nail this down to a precise figure. In fact, it is a range of potential values. Why? Because the future is uncertain, and those future cash flows are uncertain. In other words, there is risk involved. So in the optimistic scenario where everything in the business goes right, you get a high valuation. In a pessimistic scenario the valuation is lower. Which is correct? Nobody can tell from the outset. Now imagine you are doing a valuation for a business, but for the value of that business 3 years ago. You have had the advantage of seeing the trend those cash flows have taken the past 3 years, and whether you admit it to yourself or not, it will influence your valuation. That is all I am saying.