Now consider what has happened to Kodak around the arrival of the new millennium.
The biggest development has been digital photography, which does not require the types of chemical processes that was the core of Kodak's business. In fact, Kodak had not been involved with digital photography at all. With the initial discovery and penetration of digital technology, the value of Kodak's stock plummeted.
Explain why this happens in terms of the discounted cash flows, payout policy and the present value of growth opportunities.