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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Vayda who wrote (145852)	10/24/2006 12:00:04 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 152472

Jeff, re: higher dividends. Because of the preferential tax rate on dividends (as low as on long term capital gains), the current federal income tax law makes dividends more attractive than long term capital gains, especially to a lot of impatient investors who can't bear holding stocks forever. The preferred solution would be to tax dividends as ordinary income and index capital gains for inflation. You can be sure that such a simple, efficient solution, supported by many top economists, would not get much favor nowadays. Art

To: Jeff Vayda who wrote (145852)	10/24/2006 12:17:43 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 152472

Re : wondering about share buy backs -- this is the sort of stuff you "dissect" in courses at business school. (Therefore, I am supposed to know what I am talking about). (Gulp !) A QCOM share repurchased and "retired" today eliminates the obligation to pay a dividend on that share (current "cost" = 1.3%) (and, such "cost" will probably go up in the future). AND ... A QCOM share repurchased and "retired" today depletes QCOM's cash on the balance sheet currently earning (safely) (in money market instruments) around 5% (and that number 5% will go down over the next year or two, I believe). BUT ... that QCOM share repurchased and "retired" today also shrinks the number of shares that remain "issued and outstanding" ... from which which earnings per share are calculated. If the P/E ratio on QCOM is now 20, the inverse of this is 5%, so ... the "math" on the share buy backs is "good" right here (at these "numbers"). IF ... QCOM earnings go up in the future (well ... DUH !) (in my opinion), the share buy backs (now) will benefit remaining shareholders even better. Jon.