Beruflich Dokumente
Kultur Dokumente
1972
Size of Market
Cost of New Capacity/Ton
Pre-Tax Operating Expense/Ton
Market Share
Maintain
Growth
Average Selling Price/Ton
Maintain
Growth
Capacity
Maintain
Growth
1973
-
325
325
1974
-
1975
-
1976
-
1977
-
1978
-
1979
-
1980
-
1981
-
1982
-
1983
-
1984
-
1985
-
752
900
330
774
927
390
798
955
460
822
983
540
846
1013
580
872
1043
620
898
1075
660
925
1107
690
952
1140
710
981
1174
740
1010
1210
770
1041
1246
810
1072
1283
850
0.35
0.35
0.40
0.40
0.45
0.47
0.45
0.47
0.45
0.51
0.45
0.52
0.45
0.52
0.45
0.55
0.45
0.58
0.45
0.59
0.45
0.62
0.45
0.62
0.45
0.64
555
540
665
640
760
750
890
880
955
950
1015
1010
1070
1070
1120
1130
1170
1190
1210
1250
1270
1310
1320
1370
1370
1430
340
350
350
375
360
400
370
421
381
443
392
475
404
505
416
530
428
552
441
579
455
616
468
645
482
685
100000
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
263
146076
86856
59220
28426
30794
0
30794
9215
0
0
310
205884
120744
85140
40867
44273
0
44273
11962
0
0
325
247000
149500
97500
46800
50700
0
50700
8223
0
0
325
289250
175500
113750
54600
59150
0
59150
8450
0
0
325
310375
188500
121875
58500
63375
0
63375
4225
0
0
325
329875
201500
128375
61620
66755
0
66755
3900
0
0
325
347750
214500
133250
63960
69290
0
69290
3575
0
0
325
364000
224250
139750
67080
72670
0
72670
3250
0
0
325
380250
230750
149500
71760
77740
0
77740
3250
0
0
325
393250
240500
152750
73320
79430
0
79430
2600
0
0
325
412750
250250
162500
78000
84500
0
84500
3900
0
0
325
429000
263250
165750
79560
86190
0
86190
3250
0
0
325
445250
276250
169000
81120
87880
0
87880
3250
0
0
82940
69050
0
153680
21579
32311
42477
50700
59150
62855
65715
69420
74490
76830
80600
100000
1973
263
146076
86856
59220
28426
30794
0
30794
9215
13500
1350
9429
-12150
1974
1975
1976
310
359
205884 272916
120744 165186
85140 107730
40867 51710
44273 56020
0
0
44273 56020
11962 13406
9270
9550
927
955
370
329211
199746
129465
62143
67322
0
67322
11259
9830
983
23968
-8343
34018
-8459
47216
-3484
1977
1978
381
392
363569 398286
220806 243288
142763 154998
68526 74399
74237 80599
0
0
74237 80599
6871
6944
11143 11473
1114
1147
57336
-1814
63330
475
1979
1980
1981
1982
1983
1984
1985
404
416
432387 466200
266706 287213
165681 178988
79527 85914
86154 93074
0
0
86154 93074
6820
6763
12900 13284
1290
1328
428
501228
304164
197064
94591
102473
0
102473
7006
13680
1368
441
534155
326673
207482
99591
107890
0
107890
6585
15262
1526
455
577215
349965
227250
109080
118170
0
118170
8612
16940
1694
468
618354
379445
238910
114677
124233
0
124233
8228
16198
1620
482
660888
410040
250848
120407
130441
0
130441
8507
17962
1796
67724
2009
74355
4935
83156
8666
87569
10739
94312
13712
112178
170992
101427 388938
18487 235258
100000
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
263
142128
86856
55272
26531
28741
0
28741
8426
22500
2250
310
198144
120744
77400
37152
40248
0
40248
11203
23175
2318
375
281295
172528
108767
52208
56559
0
56559
16630
23875
2388
386
339979
208624
131356
63051
68305
0
68305
11737
20643
2064
431
409887
250247
159640
76627
83013
0
83013
13982
22286
2229
453
457974
281133
176842
84884
91958
0
91958
9617
33376
3338
467
499647
308194
191454
91898
99556
0
99556
8335
32250
3225
509
574888
351038
223850
107448
116402
0
116402
15048
27675
2768
552
657070
392034
265037
127218
137819
0
137819
16437
25080
2508
579
723488
428305
295183
141688
153495
0
153495
13283
31698
3170
626
820322
482174
338148
162311
175837
0
175837
19367
44770
4477
645
884225
522790
361435
173489
187946
0
187946
12781
36134
3613
686
981094
583168
397926
191005
206922
0
206922
19374
51320
5132
142645
59705
176219
394782
712361
558681
66
-21513
8187
-24124
18441
-24035
37989
-12711
48974
-10176
52302
-10553
62196
-3519
76446
7026
98811
24321
111683
34853
116177
35577
Growth Strategy
Year Excess Capacity
1973 86.80 tons
1974 65.40 tons
1975 24.94 tons
1976 34.66 tons
1977 11.54 tons
1978 21.56 tons
1979 38.04 tons
1980 18.50 tons
1981 0.00 tons
1982 0.00 tons
1983 10.00 tons
1984 0.00 tons
1985 1.00 ton
Maintain Strategy
Year Excess Capacity
1973 76.80 tons
1974 40.40 tons
1975 1.00 ton
1976 0.00 tons
1977 0.00 tons
1978 0.00 tons
1979 0.00 tons
1980 0.00 tons
1981 0.00 tons
1982 0.00 tons
1983 0.00 tons
1984 0.00 tons
1985 0.00 tons
Du Pont
Operating Profit Margin = 40%
Debt/Total Capital
= 9%
National Lead
Operating Profit Margin < 20%
Debt/Total Capital
= 35%
NPV Profiles
NPV Profiles for Growth, Maintain, and Difference Strategies
700000
600000
N e t P r e s e n t V a lu e s
500000
400000
Maintain
300000
Growth
200000
100000
0
0.00
0.05
0.10
0.15
-100000
Discount Rates
0.20
0.25
NPV (10%)Growth
62,458
140,037
-616
10,217
-1
7,769
-1,417
61,554
49,965
108,994
36,702
80,573
24,209
49,530
5,540
5,686
Antitrust Concerns?
Unfair Competition?
Challenge Change
NA
100
50
Du Ponts Strategy
Build Capacity to deter Competition
Price Titanium Dioxide to Capture the Market
Restrict Licenses of its Ilmenite Process
CFt
PV
t
t 0 (1 r )
N
The cash flows generated by the firms assets are divided among the
investors who pay for the assets. If these investors include only debt
and equity holders, the market value of the firm can be expressed as:
PVfirm = PVdebt+ PVStock
CFd ,t
t 1
(1 rd ) t
PVd
t 1
(1 rd )
(1 rd ) N
?
t
10
t
1
(
1
.
10
)
(
1
.
10
)
What is its current yield?
10
PVd
?
t
10
t 1 (1.12)
(1.12)
10
PVd
18.00%
16.00%
14.00%
Return
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
0.0
0.2
0.4
0.6
0.8
1.0
Risk
1.2
1.4
1.6
1.8
2.0
300.00
250.00
200.00
150.00
100.00
50.00
0.00
4.00%
6.00%
8.00%
10.00%
Yield to Maturity
12.00%
14.00%
16.00%
1200
1000
800
600
400
S7
200
S4
S1
0
Aa2/AA
A2/A
Baa2/BBB
Ratings
Ba2/BB
B2/B
Years to
Maturity
Stock Valuation
The price of stocks in the market place is the present value
of the cash flows that stockholders have claim to:
N
CFs ,t
t 1
(1 rs ) t
PVs
t 1
(1 rs )
(1 rs ) N
18.00%
16.00%
14.00%
Re tu rn
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
0.0
0.2
0.4
0.6
0.8
1.0
Risk
1.2
1.4
1.6
1.8
2.0
Suppose the expected dividend next period (D1) is $1.50, the expected
constant growth rate (g) is 8%, and the required return (r s)on the stock is 15%.
What is the price of the stock today
What are the expected current (or dividend) yield and capital gains yield?
How does the stock price relate to the NPV of projects undertaken by the
firm?
PVs , 0
EPS1
NPVGO
rs
The first component, EPS1/rs, is the price of the stock if equity cash
flows (or earnings) remain constant forever. The second component
is the expected NPV from future growth opportunities.
What determines whether NPVGO is positive or negative?
b * ( ROE rs )
rs * ( rs g )
20.00%
40.00%
60.00%
15.00%
8.00%
2.50
0
$
$
1
2.50 $
(1.00)
1.33
4
2.50 $
5
2.50 $
6 .
2.50 $
2.50
.
$
2.50
0.20
0.20
0.20
0.20
0.20
0.20
0.20
2.50
2.70 $
(1.08)
$
1.44
2.70
2.70
2.70
2.70
2.70
2.70
0.22
0.22
0.22
0.22
0.22
0.22
2.92 $
(1.17)
$
1.56
2.92
2.92
2.92
2.92
2.92
0.23
0.23
0.23
0.23
0.23
0.29
$
$
$
3
2.50 $
16.67
$
$
2
2.50 $
0.27
$
2.50
2.70
$
$
$
0.26
b * ( ROE rs )
rs * ( rs g )
.4 * (.20 .15)
$4.76
.15 * (.15 .08)
$2.50 *
PVs ,0
Div1
$1.50
$21.43
rs g (.15 .4 * .20)
How does the model we have just discussed relate to EVA, if it does?