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

Implementation of the medium term expenditure framework, Question: (a) ...

Question: (a) Show how the Medium Term Expenditure Framework is superior to the traditional one-year presentation of the public sector budget. (b) What are the pre-requisite

Investment decision and financing decision, The Investment Decision: - Inv...

The Investment Decision: - Investment decision as well known as 'Capital Budgeting' is related to the selection of long-term assets or else projects in which investments will be m

Common-size statement value, A firm has sales of $6,500, net income of $500...

A firm has sales of $6,500, net income of $500, total assets of $12,000, and total equity of $700. Interest expense is $1000. What will be the common-size statement value of the in

Define which proposed capital budgeting projects to accept, For a specified...

For a specified IOS and MCC, how do financial managers decide that which proposed capital budgeting projects to accept, and which to reject? For a specified IOS and MCC, all inde

Corporate debt instruments, Corporate debt instruments are the financ...

Corporate debt instruments are the financial obligations of a corporation having priority over the claims of the shareholders (equity or preferred) at the time of

Calculate the cca allowance anfd the pv of tax shield , Home Inc. is consid...

Home Inc. is considering buying a new piece of equipment, which will cost $715,000 and has an economic life of 5 years, in order to produce a new line of product. The company beli

Important areas of personal financial management, Gary and Joyce Yau, both ...

Gary and Joyce Yau, both 30, last month bought their dream house in London, Ontario. The purchase price was $450,000 plus addition fees such as taxes, legal fees, administration fe

Explain net present value method, Q. Explain Net Present Value Method? ...

Q. Explain Net Present Value Method? Net Present Value (NPV) Method: - This process measures the Present value of returns per rupee invested. In this method present value of

Describe the main elements of working capital management, Question: (a)...

Question: (a) Describe the main elements of Working capital management? (b) Belle Rive Ltd Belle Rive Ltd has an annual turnover of Rs 60 million of which 80% is on cr

Define the first aspect of capital budgeting decision, Define the first asp...

Define the first aspect of capital budgeting decision The first aspect of capital budgeting decision relates to the choice of new asset out of the alternatives available or rea

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages