Intel Corp., the world’s dominant developer and manufacturer of microprocessors (the “brain” of the personal computer), has accumulated a large amount of cash (net of debt). In addition, expected to continue to accumulate money at an unprecedented speed. The company has grown to the extent that they can start paying out cash to its shareholders? What kind of payout policy should it choose? Intel will continue to provide competitive with its imitators processors in the future, but it is not … Read more »

Intel Corp., the world’s dominant developer and manufacturer of microprocessors (the “brain” of the personal computer), has accumulated a large amount of cash (net of debt). In addition, expected to continue to accumulate money at an unprecedented speed. The company has grown to the extent that they can start paying out cash to its shareholders? What kind of payout policy should it choose? Intel will continue to provide competitive with its imitators processors in the future, but it is not clear whether its cash holdings or can be a competitive weapon in this hard-fought battle. The case focuses on financial issues and how they will interact with a very unusual and dynamic form of product market competition and innovation. Complementarity externalities and costs of financing, appropriability of returns on investments, the role of finance in high-tech sectors and innovations quickly, the strategic use of cash Analysis: Can be used as a one-or two-day exploration of the following issues the capital structure and cash payments policy, the use of fiscal policy as a competitive weapon, and the timing in the purchase and sale of equity-linked instruments.
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from
Kenneth A. Froot
Source: HBS Premier Case Collection
22 pages.
Publication Date: Feb 11, 1992. Prod #: 292106-PDF-ENG
Intel Corp. – 1992 HBR case solution

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