Untaxing-V (Customer Ownership) ch 20: Equity Adds Value
Let’s say a customer pays $33 per month for a product or service from a public company and the cost of delivery (barring a tax rate) to the customer is 37%. With no more expenses, the public company’s earnings rate is 63%. With a 3% dividend yield rate, then clearly the annual revenue from the customer of $396 (= $33 * 12 months) adds $8,316 to the public company’s market value today. $396 * 63% earnings rate ÷ 3% dividend yield = $396 * 0.63 ÷ 0.03 = $8,316.
This shows that the customer provides the same function as the investor. Money received from the customer minus expenses drives market value. Investor funds also drive market value. The customer takes no risk in purchasing a product or service. The investor takes a risk. They both bring revenue (for different reasons) that adds to the public company’s market value.
Bringing More Value to The Customer
Product Equity Value© was discovered after applying the Scientific Method and certain principles of Physics to the Public Company. The intent was to trace the origin and directions of the energy flow — also known as “revenue” — when 100% of the public company’s profits are returned to the public company’s shareholders as annual dividends.
What does the customer get? How many forms of value goes to the customer? Obviously the utility value from using products and services is one form of value. Another form of value benefiting the customer is Product Equity Value© (PEV©).
Using the $33-per-month example above, the obvious way for the customer to receive ownership is for the revenue-providing customer to share the equity produced with the risk-taking investor. If 46% of the equity produced goes to the customer, then the $33-per-month patronage from the customer also brings $3,825.36 of PEV© ownership interest in the public company to the customer. This is the second form of value benefiting the customer.
Dividing $3,825.36 by $33 and dividing the result by 12 months gives you $9.66 of equity. What does this mean?
An average of $9.66 of equity value goes to the customer for every $1 the customer spends on a product or service.
So how do we efficiently get this extra form of value — the $9.66 in Product Equity Value© for each $1 of spending — to the 155 million US labor units (and 3.2 billion global workers)?