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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (36833)	6/1/2000 4:12:00 PM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

You keep saying "higher rates" but I know you are talking about INTEREST rates. Rates in general DO matter. INTEREST rates do not matter. So let me explain again. To figure out the discounted operating cashflow value of Cisco I would have to know their operating cashflow, operating cashflow projected growth rates (not affected by interest rates), and the cost of capital rate. Now Cisco's cost of capital is not their borrowing rate, since they use their stock to acquire which is how they grow. So we'd have to look at opportunity costs, such as what if we invested the money elswhere. So growth rates will be determined by the spending in the sector, which will not be hindered by interest rates (my major assumption). And cost of capital won't be interest rates. Therefore, Cisco's long term valuation won't be affected by interest rates. If you disagree with either of my assumptions, then you disagree with my argument. So there's no use debating it. But if you disagree with my logic then please refute it. I'm interested in your opinion.