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Technology Stocks : Intel Corporation (INTC)
INTC 34.72-2.3%Nov 17 3:59 PM EST
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To: Amy J who wrote (92849)11/19/1999 12:10:00 PM
From: Michael Bakunin  Read Replies (2) of 186894
 
Thanks for the kind words, but my thought experiment is back-of-the-enevlope at best. Plug into a spreadsheet the last four-quarter numbers for earnings ($7B), revenues ($29B), GDP ($9276B), then set up a two-stage growth period with whatever limits you like. To discount, I assumed a dividend payout continuing at 5% of earnings during the high-growth period, and payout of 50% thereafter. My GDP plug was accurate; cf stls.frb.org. Under the optimistic assumptions (20% growth 'til INTC revenues = 5% of GDP), the discount rate implied in today's price is 11.7%. -mb
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