Cost Of Capital A Financial Tool To Create And Maximize Shareholder Value

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COST OF CAPITAL (A FINANCIAL TOOL TO CREATE AND MAXIMIZE SHAREHOLDER VALUE)

EMMANUEL ATTAH KUMAH
COST OF CAPITAL A FINANCIAL TOOL TO CREATE AND MAXIMIZE SHAREHOLDER VALUE Book PDF

Author : EMMANUEL ATTAH KUMAH
Publisher : Lulu.com
Page : 140 pages
File Size : 53,8 Mb
Release : 2013-07-27
Category : Business & Economics
ISBN : 9781304260451

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COST OF CAPITAL (A FINANCIAL TOOL TO CREATE AND MAXIMIZE SHAREHOLDER VALUE) by EMMANUEL ATTAH KUMAH Pdf

The cost of capital is important in the financial management of every business. A measure of the cost of capital is required when evaluating various aspects of strategic business plans, e.g., selecting a financial leverage position, calculating the profitability of alternative investment opportunities, measuring economic value-added and comparing various merger and acquisition plans. The task of determining the appropriate cost of capital to use requires a careful analysis of the effect of alternative financing choices which are open to every business. This report considers the cost of capital of Royal Roots Company. Ways are examined to determine the cost of capital by Royal Roots Company. This book sequentially identifies: principles of cost of capital, the capital structure, the cost of debt, cost of equity, cost of preference shares and overall cost of capital (weighted average cost of capital).The cost of equity capital and debt determines the overall cost of capital of any company (public or private)

In Search of Shareholder Value

Andrew Black,John Davies,Philip D. Wright
In Search of Shareholder Value Book PDF

Author : Andrew Black,John Davies,Philip D. Wright
Publisher : Financial Times/Prentice Hall
Page : 396 pages
File Size : 42,6 Mb
Release : 2001
Category : Business & Economics
ISBN : NWU:35556033024779

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In Search of Shareholder Value by Andrew Black,John Davies,Philip D. Wright Pdf

Shareholder value can no longer be seen as the latest craze in the corporate classroom. It's grown up. It's redefining the syllabus by which we learn to profit or perish. It has moved into the mainstream of global corporate life where would-be winners can no longer afford to ignore it.Drawing on the experience of PricewaterhouseCoopers' worldwide network of companies and clients, this new edition of a best-selling title will provide you with the key to unlocking the secrets to real wealth creation. The impact of the information revolution, the integration of capital markets, and the increased ability of investors to compare and contrast corporate performance has put shareholder value high on the corporate agenda. These days, investors injecting money into your company are looking for a financial return as good as, if not better than, if they had invested in any other. Today's businesses need to maximize value for their shareholders or watch their share price plummet as investors vote with their feet and transfer their money and their trust into competitors' hands.Benefits In Search of Shareholder Value explains the concept of shareholder value and shows how it can help companies and their managers make better, more informed, and proactive decisions. It looks at the philosophy of value creation and at the global financial environment in which value-based management can thrive, and it transforms the insights of market analysts into management tools that can be used throughout the company to add genuine improvements to performance. The book covers every aspect of learning how to deliver value to your investors, including: introducing the basic concepts of shareholder value analyzing the theory and history behind shareholder value establishing the true cost of your capital the market's preference for judging performance on cash flow rather than profit and loss how shareholder value is being applied within emerging economies. principels of value-based management

Valuation Methods and Shareholder Value Creation

Pablo Fernandez
Valuation Methods and Shareholder Value Creation Book PDF

Author : Pablo Fernandez
Publisher : Elsevier
Page : 661 pages
File Size : 41,9 Mb
Release : 2002-09-11
Category : Business & Economics
ISBN : 9780080520377

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Valuation Methods and Shareholder Value Creation by Pablo Fernandez Pdf

Valuation Methods and Shareholder Value Creation provides a comprehensive examination of valuation tools and guidance for analyzing and valuing a business. It covers the basics of valuation methods and shareholder value creation in addition to rigorous approaches to discounted cash flow valuation and real options for valuing a company. It highlights quantitative analyses of firm value; emphasizes qualitative management assessments; and integrates data from international companies. By examining eight different methods of discounted cash flow valuation and discussing the pros and cons of each method, the book offers thorough, accessible coverage of corporate valuation. The book provides well-structured guidance for practitioners and MBA students with a background in finance. Highlights quantitative analyses of firm value Emphasizes qualitative management assessments Integrates data from international companies

Creating Shareholder Value

Alfred Rappaport
Creating Shareholder Value Book PDF

Author : Alfred Rappaport
Publisher : Unknown
Page : 304 pages
File Size : 46,6 Mb
Release : 1986
Category : Business & Economics
ISBN : UOM:49015001174987

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Creating Shareholder Value by Alfred Rappaport Pdf

Begins with dramatic proof of the shortcomings of accounting numbers as earnings per share, return on investment, and return on equity, and explains to develop value-creating business strategies and how to ...

Creating Shareholder Value

Alfred Rappaport
Creating Shareholder Value Book PDF

Author : Alfred Rappaport
Publisher : Simon and Schuster
Page : 224 pages
File Size : 44,5 Mb
Release : 1999-10-13
Category : Business & Economics
ISBN : 9780684844565

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Creating Shareholder Value by Alfred Rappaport Pdf

The ultimate test of corporate strategy, the only reliable measure, is whether it creates economic value for shareholders. Now, in this substantially revised and updated edition of his 1986 business classic, Creating Shareholder Value, Alfred Rappaport provides managers and investors with the practical tools needed to generate superior returns. After a decade of downsizings frequently blamed on shareholder value decision making, this book presents a new and indepth assessment of the rationale for shareholder value. Further, Rappaport presents provocative new insights on shareholder value applications to: (1) business planning, (2) performance evaluation, (3) executive compensation, (4) mergers and acquisitions, (5) interpreting stock market signals, and (6) organizational implementation. Readers will be particularly interested in Rappaport's answers to three management performance evaluation questions: (1) What is the most appropriate measure of performance? (2) What is the most appropriate target level of performance? and (3) How should rewards be linked to performance? The recent acquisition of Duracell International by Gillette is analyzed in detail, enabling the reader to understand the critical information needed when assessing the risks and rewards of a merger from both sides of the negotiating table. The shareholder value approach presented here has been widely embraced by publicly traded as well as privately held companies worldwide. Brilliant and incisive, this is the one book that should be required reading for managers and investors who want to stay on the cutting edge of success in a highly competitive global economy.

Redefining Shareholder Value

Mariana Schmid,Milan Frankl
Redefining Shareholder Value Book PDF

Author : Mariana Schmid,Milan Frankl
Publisher : Business Expert Press
Page : 122 pages
File Size : 40,8 Mb
Release : 2015-07-22
Category : Business & Economics
ISBN : 9781631571671

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Redefining Shareholder Value by Mariana Schmid,Milan Frankl Pdf

Measuring shareholder value has become crucial in the current economic environment, especially following the consistent pressure from institutional shareholders on companies to create shareholder value in an adverse economic environment. Maximizing the company’s value will make the company less appealing to hostile takeovers. Takeovers are a capital market mechanism designed to control the conflicts of interest between shareholders and managers of the company. In this study, the authors examine the best methods used in measuring shareholder value, and explore the process of shareholder value creation in the years prior and following the creeping takeover of Ivanhoe Mines by Rio Tinto Plc. The study is based on data and ratio analytics from ThomsonONE (Reuters), information that is publicly available through press releases, analyst coverage, and financial news. It also includes an in-depth analysis of the creeping takeover of Ivanhoe Mines by Rio Tinto Plc.

Shareholder Value - A Business Experience

RoyE. Johnson
Shareholder Value A Business Experience Book PDF

Author : RoyE. Johnson
Publisher : Elsevier
Page : 488 pages
File Size : 41,7 Mb
Release : 2001-10-23
Category : Business & Economics
ISBN : 9780080498133

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Shareholder Value - A Business Experience by RoyE. Johnson Pdf

Shareholder Value presents a powerful and useful toolkit of market-based perspectives, analytic approaches, valuation techniques, and specific financial metrics for use in everyday business life. The author helps a broad spectrum of professionals understand the salient points and real world implications of a 'value management' movement which has taken hold in many corporations in the United States and around the world. This movement is being supported by some of the major institutional investors who influence financial markets. The main goal of 'Shareholder Value' is to help working professionals grasp the concept of value 'creators' and 'destroyers', along with the implications. He also provides tools to measure the success (or failure) of major strategic and operational initiatives and enables corporate managers to understand how shareholder value is created, and then directs behaviour toward 'value-based' planning and action. Although mainly aimed at the professional market, 'Shareholder Value' will also be of use to students of business and finance as it is intended to provide a comprehensive foundation for important elements of business strategy and acquisition valuation, corporate financial analysis, capital investments, corporate financing and economic value based metrics. AUTHOR'S REVIEW: When developing this book, I strived to achieve the following: Provide the finance professional and student of finance with a comprehensive template of shareholder value concepts and techniques - geared toward use in a corporate setting Give the non-financial professional an understanding of the underpinnings and behavioural aspects of economic value management Outline and provide details of an effective process for implementing a value-based financial performance system within a corporation ...And, combine learning with enjoyable reading by presenting technical material through a story. The "story" and "characters" are unique features of Shareholder Value - A Business Experience. The reader can get an appreciation of the environment surrounding value-based management, along with challenges that arise when transitioning from traditional "accounting" performance (where earnings and earnings per share reign supreme) to "economic" performance (where cash flow and return on investment are emphasized). Characters occupying operating and staff roles have been created to represent people that those working inside companies (large, medium and small) may encounter and, also, to invoke some humour. Insights into how to function in different corporate roles can be gained by following the characters through the story. Presents a combination of analysis and case study in which a strong technical treatment is blended with a fictional case study to offer clarity and explanation A practical and effective implementation process for a comprehensive financial performance system Offers a perspective of the role of different corporate and business unit functions in the implementation of value-based financial performance within a company

Driving Shareholder Value: Value-Building Techniques for Creating Shareholder Wealth

Roger A. Morin,Sherry L. Jarrell
Driving Shareholder Value Value Building Techniques for Creating Shareholder Wealth Book PDF

Author : Roger A. Morin,Sherry L. Jarrell
Publisher : McGraw Hill Professional
Page : 424 pages
File Size : 52,7 Mb
Release : 2000-12-27
Category : Business & Economics
ISBN : 007137986X

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Driving Shareholder Value: Value-Building Techniques for Creating Shareholder Wealth by Roger A. Morin,Sherry L. Jarrell Pdf

BusinessWeek and Harvard Business Review tout value-based management as the benchmark for creating and enhancing shareholder value. Numerous industry-leading companies embrace VBM. Now Driving Shareholder Value travels to the heart of VBM, providing approaches, perspectives, and strategies managers can use to implement VBM for better decisions and maximized shareholder wealth. The authors’ one-of-a-kind value creation framework—complete with dozens of useful worksheets, checklists, case studies, and more—draws on current practices plus 25 years of VBM lessons, including: *The four guiding principles of VBM activities *Five steps to institutionalizing VBM *An integrative VBM framework—complete with step-by-step examples

Outperform with Expectations-Based Management

Tom Copeland,Aaron Dolgoff
Outperform with Expectations Based Management Book PDF

Author : Tom Copeland,Aaron Dolgoff
Publisher : John Wiley & Sons
Page : 295 pages
File Size : 45,5 Mb
Release : 2011-09-28
Category : Business & Economics
ISBN : 9781118161050

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Outperform with Expectations-Based Management by Tom Copeland,Aaron Dolgoff Pdf

CEOs and managers live and die by delivering superior performance to shareholders. This is why expectations-based management has been developed. Outperform with Expectations-Based Management (EBM) introduces a revolutionary new performance metric that links performance standards, performance measurement, and the achievement of performance. It's easy to say that if a CEO can get performance measurement right, then performance improvement will follow. But what is the "right" measure of performance, and how do you use it to improve performance? Authors Tom Copeland and Aaron Dolgoff answer these questions and many more, as they show you how to find the measure of performance that has the strongest link to the creation of wealth for the owners of both public and private companies. They answer the puzzle of why growth in earnings is not correlated with shareholder returns and explain the under- and over-investment traps. And they explain how clear communications to investors and managers alike improve value. The bottom line is that share prices go up when companies exceed expectations -- short-term and long-term -- of income statement and balance sheet performance and daily operating value drivers. Gain a complete understanding of EBM and discover how to do this, and much more, while staying competitive in an unforgiving business environment.

Best-Practice EVA

Bennett Stewart
Best Practice EVA Book PDF

Author : Bennett Stewart
Publisher : John Wiley & Sons
Page : 357 pages
File Size : 47,9 Mb
Release : 2013-02-19
Category : Business & Economics
ISBN : 9781118645314

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Best-Practice EVA by Bennett Stewart Pdf

Best-Practice EVA tells the new EVA story from the ground up. Stewart covers EVA essentials—the classic economic profit version of EVA—in the first three chapters of the book. He shows readers how simple and intuitive EVA really is, how it is defined, and why it is better than all other measures of corporate profit. You discover how it naturally guides managers into making all the right decisions—the ones that will truly maximize value. You see how to use it in profit-sharing bonus plans that create the powerful incentives of an owner. Later, Stewart introduces new ratios that make EVA much more powerful and much easier to use than ever before. The pinnacle of the new ratio framework is EVA Momentum, calculated by taking the change in EVA versus the prior period, and dividing by the revenues in the prior period. It measures the growth rate in EVA, scaled to the sales size of the business. It is the only corporate performance ratio where bigger always is better, because it gets bigger when EVA does, which means it should be every company's most important financial goal, the one ratio metric that everyone aims to maximize as the key measure of corporate success. Stewart then walks through the nuts and bolts of Best-Practice EVA, kicking off with an in-depth look at EVA Margin, or EVA as a percent of sales. It’s a key productivity metric, and Stewart’s candidate to replace ROI. The last link in the Best-Practice program is PRVit—the EVA market score report. Stewart shows how to read and interpret the report, how the score is determined, and why investors are turning to it to screen and rate stocks. He also shows why it is finding a home with CFOs and IR directors who want insights into how the market is pricing their stock. The book concludes with battle-tested tips from the firing line, practical suggestions for how you can test drive and adopt Best-Practice EVA at your company.

Translating Strategy into Shareholder Value

Raymond J. Trotta
Translating Strategy into Shareholder Value Book PDF

Author : Raymond J. Trotta
Publisher : AMACOM Div American Mgmt Assn
Page : 294 pages
File Size : 53,6 Mb
Release : 2003-09-19
Category : Business & Economics
ISBN : 0814429335

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Translating Strategy into Shareholder Value by Raymond J. Trotta Pdf

Too often there are serious missed signals between a company’s stated goals and the methods employed to try to reach them. Translating Strategy into Shareholder Value is a unique look at how the planning process relates to the achievement of shareholder value, and ways to ensure that the two directly complement each other. Using tools and a special case study to analyze past, present, and future performance, the book takes readers through a host of steps, including: * Comparing existing strategy to the competition and the economy as a whole * Analyzing productive capabilities and costs * Bringing nonfinancial metrics to test how future strategy creates value * Selecting the right analytical tool and looking at strategic solutions If corporations are to truly maximize their success, managers need to understand how to translate corporate strategy to the bottom line -- and that means seeing the big picture.

Valuation

McKinsey & Company Inc.,Tim Koller,Marc Goedhart,David Wessels
Valuation Book PDF

Author : McKinsey & Company Inc.,Tim Koller,Marc Goedhart,David Wessels
Publisher : John Wiley & Sons
Page : 903 pages
File Size : 42,6 Mb
Release : 2020-06-30
Category : Business & Economics
ISBN : 9781119610885

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Valuation by McKinsey & Company Inc.,Tim Koller,Marc Goedhart,David Wessels Pdf

McKinsey & Company's #1 best-selling guide to corporate valuation—the fully updated seventh edition Valuation has been the foremost resource for measuring company value for nearly three decades. Now in its seventh edition, this acclaimed volume continues to help financial professionals around the world gain a deep understanding of valuation and help their companies create, manage, and maximize economic value for their shareholders. This latest edition has been carefully revised and updated throughout, and includes new insights on topics such as digital, ESG (environmental, social and governance), and long-term investing, as well as fresh case studies. Clear, accessible chapters cover the fundamental principles of value creation, analyzing and forecasting performance, capital structure and dividends, valuing high-growth companies, and much more. The Financial Times calls the book “one of the practitioners’ best guides to valuation.” This book: Provides complete, detailed guidance on every crucial aspect of corporate valuation Explains the strategies, techniques, and nuances of valuation every manager needs to know Covers both core and advanced valuation techniques and management strategies Features/Includes a companion website that covers key issues in valuation, including videos, discussions of trending topics, and real-world valuation examples from the capital markets For over 90 years, McKinsey & Company has helped corporations and organizations make substantial and lasting improvements in their performance. Through seven editions and 30 years, Valuation: Measuring and Managing the Value of Companies, has served as the definitive reference for finance professionals, including investment bankers, financial analysts, CFOs and corporate managers, venture capitalists, and students and instructors in all areas of finance.

Increasing Shareholder Value

Harold Bierman Jr.
Increasing Shareholder Value Book PDF

Author : Harold Bierman Jr.
Publisher : Springer Science & Business Media
Page : 149 pages
File Size : 48,5 Mb
Release : 2012-12-06
Category : Business & Economics
ISBN : 9781461515050

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Increasing Shareholder Value by Harold Bierman Jr. Pdf

Corporations earn incomes and amass wealth. There are many books offering advice how to increase the profitability of corporations by achieving excellence in operations and choosing the correct strategic path. Increasing Shareholder Value: Distribution Policy, A Corporate Finance Challenge is concerned with how the corporation should reward its shareholders after the incomes are earned. Investment decisions, capital structure, and dividend policy must be coordinated so that the well being of the firm's stockholders is considered in the planning process. The corporate planners should realize that the individual investors are also making plans, and the corporation can assist this planning process by making its own financial plans and strategies well known.

A Study on the Integrated Approach of Shareholder Value Analysis

Tony Müller
A Study on the Integrated Approach of Shareholder Value Analysis Book PDF

Author : Tony Müller
Publisher : Anchor Academic Publishing (aap_verlag)
Page : 145 pages
File Size : 43,9 Mb
Release : 2014-10
Category : Business & Economics
ISBN : 9783954892631

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A Study on the Integrated Approach of Shareholder Value Analysis by Tony Müller Pdf

The theory of shareholder value is an issue that has to comprise a dichotomy in terms of the standpoint from which it is looked at. Shareholders and the management of a company in many cases still represent counterparts whereas interests do not continuously align. In this study shareholder value theory is approached by investigating the shareholder perspective in correspondence to shareholder wealth gains in the UK market environment through the implementation of six major financial performance measurement methods including: the Price/Earnings ratio, the Discounted Cash Flow Model, the Dividend Valuation Model, the Economic Value Added, the Market Capitalization, the Capital asset Pricing Model and the shareholder value approach as suggest by Alfred Rappaport. Having applied them to six selected stock listed companies enabled the author to develop a shareholder value ranking according to their financial performance and the deriving shareholder value dedication.

The Real Cost of Capital

Tim Ogier
The Real Cost of Capital Book PDF

Author : Tim Ogier
Publisher : Pearson UK
Page : 272 pages
File Size : 52,7 Mb
Release : 2012-12-27
Category : Business & Economics
ISBN : 9780273748250

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The Real Cost of Capital by Tim Ogier Pdf

"This book is required reading for anyone involved in the practical issues of cost of capital decisions. It is written in a way that engages the novice, and yet challenges the professional to rethink the real issues." Brendan Scholey, Bloomberg. The cost of capital is the fundamental financial tool for business decision-making. It drives measures of value creation and destruction, and forms the basis of financial analysis using cash flow and other frameworks. This book is here to help the business world to use the cost of capital for real. The Real Cost of Capital describes the key issues in understanding and using the cost of capital today, taking principles from the world of managerial finance and putting them into the context of major investment decisions. Should, for example, a company use its own cost of capital to appraise new investments and acquisitions? What cost of capital might a US company use when appraising an investment in, say, the Philippines? For a typical investment, which type of risk is more important – specific risk or systematic risk? How should these risks be reflected in, say, a venture capital situation? Debt is cheaper than equity – so why don’t companies raise more debt than they do? Most practitioners use the weighted average cost of capital ("WACC") in valuation and appraisal – but when should an alternative approach be used? This book will help you find the answers. The Real Cost of Capital is required reading for anyone involved in the practical issues of cost of capital decisions. It brings together the latest academic thinking with practical requirements in a real-life context, and the authors have used their combined experience of advising governments and international blue-chip companies to bring readers up to date with current issues. The Real Cost of Capital includes chapters on choosing models, calculating the cost of capital using real-life data sources, and calculating the cost of capital in an international context (a subject not usually covered in academic texts). It also has chapters and worked examples on the practical application of the cost of capital in business valuations, high-tech situations and the wide range of premia and discounts that can be applied to the cost of capital. The book has an associated website www.costofcapital.net which contains some current links. The site also gives access to tax rate information and financial data relevant to using cost of capital around the world. The objective is to make sure that the corporate planner, student, adviser or decision maker, when she/he is on the road, can simply open the book or dial in and take advantage of a wealth of decision-making support, without the pain of extended academic study.