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Authors: Chattopadhyay, Arup
Rakshit, Debdas
Issue Date: 2010
Publisher: Vidyasagar University , Midnapore , West-Bengal , India
Series/Report no.: Vidyasagar University Journal of Commerce;2010
Abstract: Different measures have been employed by different scholars for the measurement of shareholders’ value creation. But none of these is free from limitations. A modest attempt has been made in the study to measure this value actually from shareholders’ point of view using a new methodology. It is proposed that instead of traditionally computing MV/BV, EVA,MVAor SVAthe shareholders’ value creation should simply be calculated as: Market value of equity multiplied by (Shareholders’ return – Ke). Here shareholders’ return should be determined as the long-term return on equity on the discounted cash flow basis and Ke should be calculated as usual by estimating â from security market line, of course, after the eliminating short-term volatilities in share prices. Empirically it is observed that this proposed conceptually sound method is totally different from other existing methods of value creation.
Description: 1-17
ISSN: 0973-5917
Appears in Collections:Vidyasagar University Journal of Commerce Vol.15 [2010]

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