assumethatthecompanycanraisethereturnoncapitalonits
newinvestmentstothecostofcapitalimmediately,thevalue
of equityjumps to $2.323billion, resulting in a valueper
share for the company of $12.47 (shown inFigure 13.5).
FIGURE 13.5Blockbuster: Restructured
It is worth noting that Blockbuster has two classes of
shares—118millionclassAshareswithonevotingrightper
shareand 63 millionclassBshareswithtwovotingrightsper
share.Atthetimeofthisanalysis,bothclassesweretradingat
roughlythesamepriceof$9.50pershare.Wewillreturnto
theissueofvotingandnonvotingsharesandthedeterminants
of pricing differences later in this chapter.
ILLUSTRATION13.3:TheValueofChangingManagement:
Nintendo