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Technology Stocks : How high will Microsoft fly?
MSFT 477.81-1.2%1:48 PM EST

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To: ThomasG who wrote (3102)9/15/1997 9:05:00 PM
From: Reginald Middleton   of 74651
 
Actually, MSFT is putting more money into R&D (which doesn't immediately register as earnings) and deferred accounts (ex. deferred taxes, deferred revenue accounts, etc.). This serves to reduce the E portion of the P/E ratio, and serves to increase the P portion, since astute institutional investors attribute higher values to companies in which mgmt. invest more aggressively (R&D).
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