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A programmed equity‐redemption approach to the finance of public projects
Author(s) -
Chapman C. B.,
Cooper Dale F.
Publication year - 1985
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090060208
Subject(s) - equity (law) , economics , equity capital markets , finance , discounting , debt , context (archaeology) , business , financial economics , microeconomics , valuation (finance) , political science , paleontology , law , biology
A programmed equity‐redemption approach to finance and analysis is discussed in the context of the financial feasibility of a capital‐intensive project. The approach was developed in relation In a large hydroelectric power‐development decision; il is illustrated here using domestic wail‐insulation as an example. It separates the roles of conventional debt‐providers, programmed redemption equity‐providers, conventional equity‐providers and consumers. Equity with a programmed redemption pattern provides a bridge between conventional debt and equity. Even if il is not used as a means of finance, it provides a new perspective on investment analysis, by separating safe normal profits and uncertain supra‐normal profits in a conceptually convenient framework. In the latter context it complements a parametric discounting treatment of economic desirability analysis discussed in an earlier paper.