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

To: hueyone who wrote (62735)	1/19/2003 1:50:24 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

HI Hueyone, actually, I still think that free cash flow can be used to value a company that is into heavily using stock options. You just have to make sure you take into account all the stock options transactions, like expensing the options and making sure you aren't adding things like cash inflows for things like options exercises. Like you said, cash inflows are more than offset by cash outflows to keep the o/s shares steady. Either way, I have an implied growth factor in my fully diluted o/s share # that I use to calculate share price. So my discounted cash flow calc ensures that no manipulations due to stock options become relevant. P.S. Business acquisitions should be deducted when they are purchased. Then if they turn out to be accretive, the incremental amount will show up in earnings. So it is a valid deduction.