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

To: GVTucker who wrote (36877)	6/1/2000 5:40:00 PM
From: RetiredNow	Respond to of 77400

Fixed income securities are competitive with owning Cisco stock, most certainly. But if I were looking for the cost of capital for Cisco, I'd look where else they'd get the money to do business as usual. That would be their cash and cash equivalents. Where do they invest their cash now? What is the projected rate of return on those investments? What is the risk associated with those investments? That would give me the risk adjusted cost of capital that I would use as their discount rate. But I think we can agree to disagree here, because there are an infinite number of ways to determine opportunity costs or discount rates. Your method is just as valid as mine. I think it just boils down to your base assumptions. Good luck to you!