Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Aaron Cooperband who wrote (4907)	1/31/1997 12:49:00 AM
From: AK2004	of 1577828

Aaron OK, let's do it quick-and-dirty: example 1: what is current quarterly dividend of intel? Is it $.05 or something like that. All investment in the equipment is going to depreciate so the only thing you can count on is dividends plus growth. Let's use a discount rate of 20% which would be appropriate for the risk. Now I will let you derive what is the growth rate supposed to be to justify the price. example 2: msft does not pay any dividends what so ever and hence got a zero value. (after all the value of the company is equal to present value of all distributable earnings that is cash dividends) my point is that maybe the approach of taking k6 profits and discounting them back is not a very good estimate of the value Best Regards -Albert

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