3.5
This 30% drop in operating margin increases peak funding (which is a major determinant of investor risk) and drops the real rate of return (i.e. after deducting inflation). As follow:
(A)
(B)
Peak Funding
$5.9 Billion
$6.5 Billion
Real Rate of Return
5.2%
0.1%
3.6
In essence an investment in this cable system in a market where SMATV has an earlier start (situation (B)), is not viable.
- 8