A programmed equity‐redemption approach to the finance of public projects

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.