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  "notes": "This slide explains the theoretical basis for using capacity-based valuation multiples in finance.",
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      "kind": "callout",
      "text": "Differences in per-unit profitability will determine differences in valuation",
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      "text": "EV multiples can be used to compare crossborder implied market values of revenue-generating units",
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      "text": "These measures tell us nothing about the relative underlying profitability of the assets nor do they give any other clues about the drivers behind differences in value.",
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      "text": "Enterprise value multiples are often used to compare the implied value of productive assets to enable comparison across firms operating within the same industry.",
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      "text": "Formula: EV/Unit = (ROIC - g) / (ROIC x (WACC - g)) * NOPLAT/Unit",
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      "text": "Consider, for example, a cement firm with a return on capital of 12% growing at 3% pa. If it earns US$10 per tonne in operating profit than an investor with a required return on capital of 10% will be willing to pay up to US$107 per tonne of capacity:",
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      "text": "Definition: Core EV/units of capacity (such as tonnes of cement capacity) or another revenue-generating unit (such as subscribers).",
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      "text": "EV/Tonne = (.12 - .03) / (.12 * (.10 - .03)) * US$10 = 10.7 * US$10 = US$107 per tonne",
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      "text": "Valuation Multiples: A Primer",
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      "text": "EV/Capacity Measure",
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