that same House by only seven votes (European Business Journal, 1989). When the tunnel was finally being constructed in the late 1980s and early 1990s bond yields in London were close to 11% (European Business Journal, 1989). Ironically, almost two centuries after Napoleon's engineers have mastered the technology of boring through chalk marl at great depths below sea level. Investment banks have also learned to project uncertain cash flows into the distant future, with the help of personal computers. However the Bank of England, the Bank of France, and uncounted governments and debtors worldwide have failed to improve on 19th century interest rates. If Eurotunnel PLC had been able to borrow at 2% or 3% instead of at 10% to 15% the present outlook of the owners of Eurotunnel stock would most likely be much brighter.
Eurotunnel appears to have been a type of concept investment. The concept was that one would buy now for capital-gains possibilities and hold until profitability set in, then collect the dividends comparable to that of a public utility. It apparently has been difficult to apply a valuation to the hypothetical income stream that will be generated from Eurotunnel, although some have tried. (Financial Times, February 4, 1990). One bullish projection published in 1990 showed net earnings of 8 pence a share starting in 1996, which would be the company's first profitable year. At the time that projection was made Eurotunnel shares were quoted at 550 p
...