Application of shareholder value maximization framework, Financial Management

Assignment Help:

Application of Shareholder Value Maximization Framework

Factors affecting Shareholder's Value are:

Capital Market Conditions
Profitability à Includes factors like Sales Turnover and Profit Margin
Risk
Growth

Assessing these factors for the company gives us a framework on which one can base a buying/selling criterion for the company's stock.

Profit: If a company has been showing an increase in its profit margin for the past years, and there is still scope in this respect as the company is now increasing its product range and with demand expected to remain due to its market. Hence the positive '+' rating.
Risk: The risk factor for any company is always a matter of subjectivity. Hence the neutral rating 'O'.
Growth: Potential for growth is always there for a company in this field.
Capital Market Conditions: Capital market conditions are quite unpredictable and with the ever-changing global scenario it is quite difficult to gauge this properly. Hence the neutral 'O' rating.

Related Discussions:- Application of shareholder value maximization framework

Strategies of hedge funds, Strategies of Hedge Funds: Hedge funds use ...

Strategies of Hedge Funds: Hedge funds use a range of different strategies, and each fund manager can argue that he or she is unique and could not be compared to other manager

A-/a3, This is usually the third- or fourth-highest rating that a rating ag...

This is usually the third- or fourth-highest rating that a rating agency allocates to a security or insurance carrier. It is frequently the lowest investment-grade rating, but it i

Which currency has used in an international acquisition, Which currency has...

Which currency has to be used in an international acquisition in order to calculate the flows? It can be completed in the local currency or in the currency of the parent compan

Define the conversion ratio and conversion value, Define the following term...

Define the following terms that relate to a convertible bond: conversion ratio, conversion value, and straight bond value. The term conversion ratio is the number of shares of c

Treasury bills or t-bills, Treasury bills are the bills, the governme...

Treasury bills are the bills, the government issues with maturity period of one year or less than one year. Treasury bills are usually issued as discount securiti

Credit analysis of non-corporate bonds, Like corporate bonds, non-cor...

Like corporate bonds, non-corporate bonds such as asset-backed securities, mortgage-backed securities, municipal bonds, sovereign bonds are also exposed to credit

Global equity indexes, Global Equity Indexes: As described earlier in t...

Global Equity Indexes: As described earlier in this chapter, there are several stock market indexes available which depict the performance of particular sectors and a country a

Accumulation option, It is a policy feature of permanent life insurance tha...

It is a policy feature of permanent life insurance that permits policyholders to left any dividends obtained with the insurer, where the dividends can gain interest. Accumulation o

Explain benefits of currency option contract as hedging tool, What are the ...

What are the advantages or benefits of a currency options contract as a hedging tool compared with the forward contract? Answer: The major advantage of by using options contra

Illustrating a straddle, Options Traded on Legal and General August 14 200...

Options Traded on Legal and General August 14 2009 Share Price Exercise Price Calls Puts Sep Dec Mar

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages