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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 77.56-0.9%2:12 PM EST

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To: Stock Farmer who wrote (52149)4/26/2001 9:20:38 AM
From: John Malloy  Read Replies (1) of 77400
 
Why discount free cash flow? Free cash flow is good to have, but it does not wind up in your pocket.

For a firm like Cisco that is not likely to pay dividends the only cash that winds up in your pocket is the net proceeds when you eventually sell. Instead of forecasting free cash flow, why not forecast the stock price (forecast equity/share and the price/book ratio and multiply one by the other) and discount proceeds from the future sale of the stock?

John Malloy
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