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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Voltaire who wrote (83880)	12/5/1998 6:34:00 PM
From: Chuzzlewit	Respond to of 176387

You are taking what I said out of context. Second, and more important, given that the average cost of capital is significantly higher than the interest-free rate, I would expect the price per share to decline if Dell did not repurchase its shares or dividend the cash to shareholders. The reason is that theoretically, at least, when a company invests in an opportunity yielding less than its average cost of capital, the price of the stock will fall. The point is that you invest only in projects whose expected yield (IRR) is greater than the average weighted cost of capital. If such opportunities are not present you dividend the cash or repurchase shares. CTC