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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (157961)	2/6/2002 9:59:36 PM
From: AK2004	Respond to of 186894

Ten re: the cost to AMD is a lot more than the price they're probably paying. I guess that you are trying to say that amd would spend extra money before it would see some profits out of the deal. I agree with you on that but there is always but..... :-)) I recall someone was giving a lecture on financing. That person gave simple example: assume that you can borrow at the rate of ib and can invest with earnings ie then what is the optimal amount you should borrow. The answer was that nothing if ib >=ie and as much as possible if ie>ib. In amd's case that would mean that if risk adjusted pv of distributable earnings is more than 0 and it does not create a financing problem for their main lines then amd should invest even if they would have to borrow extra money. Regards -Albert