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the present value at Apple's cost-of-capital (12.5%) would be:

$44/.125 = $352. Even adding cash per share of $42 brings us to only $394--still less than where it's trading.

A couple of points. Apple's cost-of-capital is closer to 6.75 percent and the cash per share is close to $146/share. Using your analysis, we get
$44/.0675 = $651. Add in the cash and we get $797/share = way above where we are trading.

For the cost of capital I use the common approach of US Treasuries + (beta of stock * market risk premium). There is no debt component as AAPL has no long-term debt.

Also, remember that cash is increasing about $10B/quarter, even with dividend payments.

Bottom line, I believe AAPL is way underpriced, even with no growth.
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