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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (1155)	1/19/1998 11:06:00 AM
From: Zeev Hed	Read Replies (2) \| Respond to of 9980

Actually, in my figures I used a number of Dow companies (like MRK). But since you bring INTC to the picture, for a company with a growth rate of 20% or more, 2.5% is quite a good dividend. If they paid this out as dividend, they would have had to pay between 4% to 5% for the holder to end up with the same amount in their pocket. If you are in a 10% state taxes state, and you are relatively wealthy and pay the top rate of 39.6%, your tax rate on dividend woulr be quite close to 50%, to end up with 2.5% return, INTC should pay out 5% to you. As you can see even INTC (a fast grower) is paying out quite a remarkable dividend once you take into account taxation. And I hope you do not write your congress man either. The reason INTC can keep such a growth rate is massive investments in R&D and capital equipment (another form of corporations deciding whjere your dividend money should go). Thus in view of these is INTC really grossly overvalued here? (and I still think it could drop to the low 60's mind you, where I think it will be an unusual bargain). Zeev