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Technology Stocks : Dell Technologies Inc.

DELL 133.35

+0.1%

Nov 28 9:30 AM EST

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To: Moominoid who wrote (43175)	5/19/1998 12:03:00 PM
From: Chuzzlewit	Read Replies (5) of 176387

David, there are so many problems with you analysis that it is difficult to find a good starting place, but let me do it in the order in which it comes to mind. 1. DCF depends on discounting free cash flows -- you have used earnings instead; 2. Your earnings growth rate are significantly lower than consensus analysts' estimates. I show the consensus estimate at 40% for long-term growth rate; 3. Using a 5% "stub" for a mature industry is ridiculous. Perhaps you would be better served to use the projected growth rate of the entire S&P500 as the mature growth rate; 4. You didn't specify the discount rate you used, or the method by which you arrived at it; 5. Finally, it is odd that you invoke CAPM as the basis for your analysis, since that model is essentially based on the concept of the market line (efficient market hypothesis). I suspect that what you were talking about is a dividend capitalization model (but see comment #1 above). I await your response. TTFN, CTC

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