Investor Expectations

Written Case Scenario A

Drones ‐ Higher growth / Action‐Capture Cameras ‐ Lower Growth

Growth of Unit Sales of Unmanned Aerial View Drones (HISTORICAL thru 14 AND PROJECTED 15‐18)

Period WorldwideNAEALAA‐P
Years 6‐7Historical16.5%‐18.5%15.5%‐17.5%15.5%‐17.5%19.0%‐21.0%19.0%‐21.0%
Years 8‐9Historical12.5%‐14.5%11.5%‐13.5%11.5%‐13.5%15.0%‐17.0%15.0%‐17.0%
Years 10‐11Historical9.5%‐11.5%8.5%‐10.5%8.5%‐10.5%11.5%‐13.5%11.5%‐13.5%
Years 12‐13Historical6.5%‐8.5%5.0%‐7.0%5.0%‐7.0%8.5%‐10.5%8.5%‐10.5%
Year 14Historical4.0%‐6.0%3.0%‐5.0%3.0%‐5.0%5.5%‐7.5%5.5%‐7.5%
Years 15‐18Projected5.0%‐7.0%4.0%‐6.0%4.0%‐6.0%6.5%‐8.5%6.5%‐8.5%
Growth of Unit Sales of Action‐Capture Cameras (HISTORICAL thru 14 AND PROJECTED 15‐18)
Years 6‐10 Historical6.0%‐8.0%4.5%‐6.5%4.5%‐6.5%8.5%‐10.5%8.5%‐10.5%
Years 11‐14 Historical4.0%‐6.0%2.5%‐4.5%2.5%‐4.5%6.0%‐8.0%6.0%‐8.0%
Years 15‐18 Projected3.0%‐5.0%1.5%‐3.5%1.5%‐3.5%5.0%‐7.0%5.0%‐7.0%

Consolidations are not allowed in the industry (i.e. – no ability to buy another company) Diversification to another industry – related or unrelated– is not allowed.

No major entrants or exits from the industry.

Investor Expectations for the upcoming time period have changed (given from Year 14 – Year 18).

 EPS ($)ROAE (%)Stock Price ($)Cr RatingImage Rating
Year 14$9.2542.5%$230A‐75
Year 15$10 or + $0.75 above current45% or +2.5% above current$250 or +$20 above currentA‐75 or maintaining current if higher
Year 16$10.75 or + $1.50 above current47.5% or +5.0% above current$270 or +$40 above currentA‐75 or maintaining current if higher
Year 17$11.50 or +2.25 above current50% or +7.5% above current$290 or +$60 above currentA76 or +1 above current
Year 18$12.50 or +3.25 above current52 or +9.5% above current$310 or +$80 above currentA77 or +2 above current

Each company/team member should write the case as if these are the new projections agreed upon by the board of directors (i.e. – whatever your issue is, you should be coming up with a plan to target one or more of these outcomes). You should analyze YOUR company’s ability to meet these expectations based upon your standing in the industry. For instance, if you are currently meeting several of the Investor Expectations but not all of them, then your issue might be that you are not meeting current expectations on X, so you have several alternatives to improve upon achieving this outcome in the future. SO, your ISSUE is YOUR company’s issue based upon what you have done (and current standing) but keeping in mind the changing nature of the industries you are in. (See Additional Guidance document).

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