Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 173.89

+1.7%

11:38 AM EST

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To: Wyätt Gwyön who wrote (116096)	3/27/2002 7:43:19 PM
From: Rocket Scientist	Read Replies (1) of 152472

Sorry, I'm not following your math. By "QCOM NPV" do you mean NPV of the forecasted earnings stream? If I understand your scenarios correctly, NPV of Case 1 (13% discount rate, eps growth 30%X5yrs+15%X5yrs+6%X20yrs) is about 43$, if we start at 1$/share earnings in the first year But this does not take into account any perpetuity factor for the company (i.e. the QCOM s/h gets not just the company's earnings over the 30year (or whatever) but retains ownership of the underlying earnings generator) To take your admittedly "wildly bullish" scenario, the lucky QCOM s/h will still own at the end of ten years, a security producing $7.50 per share in earnings (or 187$ per 1K$ invested today at 40$ per share) plus his share of Q's retained earnings during the period would amount to over 41$ per share. A person who buys a 10year, 6% bond today will have collected (and paid taxes on) 791$ in interest, gotten his principal back, and be looking around for another bond to buy. None of these figures is discounted, of course.

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