Hi Bets,
There's a thread on Phil Town's Blog regarding the MOS calculation...and yes, using a PE of 40 gets you very close to the MOS. However, Phil points out that it's a tough one to fix a price to and concludes:
My best guess... and this is a long way from the kind of certainty we seek... is that the market has priced AAPL just about right. If you want a 15% return with no MOS, pay $84 and watch out. It would be nice to buy it for $42, though, wouldn't it?
Now go play,
Rule #1 Blog: Phil Town on Investing: Rule #1 Question of the Week: What About Apple?
There's a lot of uncertainty with the backdating options. But...I feel the iPhone has the potential to make this stock a big winner this year but we'll have to wait till summer to know more.