VALUATION ATTEMPT:

Back in Feb 2017, Judges Millet and Ginsburg wrote that our company is not undergoing "liquidation" in their opinion, and like a good corporate finance student I first calculated the net present value of my equity FNMAT as promised in the prospectus (8.25% dividends unless called back at par, valuing it as a perpetuity). If dividends are turned on in future it will be a delayed perpetuity and discounted further based on when dividends are turned on. I'm revisiting this today to compare this option (the odds of this best case scenario) to alternative investment decisions.

NPV = Dividend/(r-g) where r is the discount rate and g is the growth rate (assuming zero growth rate, and beta =1 for a low risk utility)

Using Professor Aswath Damodaran's discount rate teachings, Discount rate = Risk free rate + Implied Equity risk premium at current level of index*Beta = 2.37%+ (4.68%*1) = 7.05%

NPV whenever dividends turned on (example today)

= 2.06/0.0705%

= 29.22 FOR FNMAT

NPV if dividends turned on after capital raise completed 12/31/2020 as per Moelis blueprint (3 years from now)

29.22 discounted back at 7.05%

= 24.00 for FNMAT

EDIT: based on this valuation and revaluing it as an option at current price of 6.87, markets are giving 28.6% chance of this working out. That is still a mispricing with the ever-changing narrative