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

To: qgambit who wrote (171696)	10/22/2002 8:50:59 AM
From: GVTucker	Read Replies (1) \| Respond to of 186894

qgambit, RE: A 10% discount rate is way too low for a company like Intel. I suppose it can be argued that you could bump up the rate a percent or two, but I don't see any justification for a significantly higher rate. 5 year treasuries are close to 3% right now. A 7% risk premium seems pretty good to me, and certainly within historical parameters. Heck, it was only a couple of years ago that a lot of people were arguing that stocks should be discounted at a rate EQUAL to treasuries. I thought that was really silly, but was mocked by a lot of people who decided that I just couldn't get the new economy. While zero risk premium has now been discredited for the most part, it's kind of interesting to me that I now find that I'm starting to disagree more often with the bears. Once the bears start to get a bit more irrational, I'm really going to get interested.