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Technology Stocks : All About Sun Microsystems

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To: Steve Dietrich who wrote (53793)	4/18/2003 3:35:20 AM
From: technologiste	Read Replies (2) of 64865

No, the proposal is that some percentage of income from stock dividends would simply not be taxed. Taxes on the capital gains of stock sales would take into account the dividends the company had paid (or could have paid) during the period the stock was held. Incidentally, a tax cut for stock dividends would not favor any kind of company over any other as an investment. The value assigned to growth companies derives from their future dividend stream. The value assigned to mature companies also derives from their future dividend stream. On both dividend streams an investor pays (or would pay) tax at the same rate, so whatever that tax rate is, it does not affect the companies relative valuations. But back to Sun. Scott McNealy was quoted recently as saying that a company's earnings are an "opinion" while its cash is a "fact". (I'm not so sure that saying earnings are an "opinion" will bolster investors' confidence in Sun's numbers - especially in light of all the recent corporate accounting scandals - but then again, I don't run Sun's PR department). After reading Scott's quote, my question is simply: What about a company's revenues? Are revenues an opinion or are they a fact?

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