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Politics : Formerly About Advanced Micro Devices

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To: AK2004 who wrote (4908)1/31/1997 1:01:00 AM
From: Aaron Cooperband   of 1577190
 
Albert -

You are confusing earnings per share and dividends per share.

Earnings per share is the amount of earnings your fractional ownership of the company has claim to. I would argue that this is a VERY relevant number to all shareholders.

Dividends per share is the amount of cash the company decides to pay everyone who holds some fractional ownership, regardless of how much the company actually earns in its core business. Even if dividends per share is zero, a company with a non-zero earnings per share clearly has some value.

When deciding to purchase a business (such as the K6 business), a logical way to determine how much to pay is to figure out how much the business will earn, and to pay less. Did AMD's management do this?

Aaron
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