Creating Shareholder Value: A Guide For Managers And Investors
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.
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accounting alkaline batteries assessment assets average book value business unit buyer calculated capital rate cash flow Chapter company’s shares competitive advantage corporate rate corporate value cost of capital create value CUMULATIVE debt depreciation developed discounted dividends Duracell earnings economic employees estimate fixed capital investment forecast period Gillette’s holder value hurdle rate increase incremental investment industry investors long-term management’s market expectations market value ment mergers and acquisitions million NOPAT operating cash flow operating profit margin P/E ratio performance evaluation plans premium present value projections rate of return residual income residual value Retail risk Sales growth rate seller share price share repurchase shareholder returns shareholder value added shareholder value approach short reg long short reg Table stand-alone value stock market stock options strategy synergies target threshold margin tion undervalued valuation value added SVA value created value creation value drivers VALUE VALUE VALUE value-creating
Page 6 - We have 40,000 employees and 1.3 million representatives around the world," says Hicks B. Waldron, chairman of Avon Products, Inc. "We have a number of suppliers, institutions, customers, communities. None of them have the democratic freedom as shareholders do to buy or sell their shares. They have much deeper and much more important stakes in our company than our shareholders.