what a pile of schist, page-19

Joewolf,
I agree with some of this;
1) I agree that a good capital raising could reduce percieved risk, lower required return and increase share price. This is because a lower geared PSH with more financial 'depth' would be better placed to optimise the business and ride out any shocks.
It would have been better if PSH was born with more capital. The difficulty now will be getting those extra funds. New investors will require some view of when dividends will restart.
2)I agree there are some parts of a manufacture plant which will last a long time and some a short time. In PSH's case at 70 years old most parts will be showing their age.
I think it appropriate to estimate the appropriate maintenance cost based on the replacement value of the entire plant.The current replacement value considers inflation since the plant was built as new parts will be at today's price.
Bigger more expensive plants need more maintenance to upkeep. Small simple plants are cheaper.
I know if you buy a boat it costs (rule of thumb) about 10% of its replacement value a year to keep it. Or if you buy a truck you need to put a certain amount into it each year or plan to replace it. Same with planes.
I don't know what the appropriate ratio is for chemical plants but we can all guess (perhaps its on the net somewhere).
3) I don't think that because something has a high replacement value that that reflects its value today. Consider a steam locomotive; would cost a fortune to build today but is only worth putting in a children's park today because it costs to much to run and maintain at the end of its life.
Regards
Bacci