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    ete83's Avatar
    ete83 Posts: 2, Reputation: 1
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    #1

    Feb 1, 2007, 01:36 AM
    Maximizing shareholders wealth
    Identify various factors that can influence a companies primary goal of maximizing shareholders wealth.
    CliffARobinson's Avatar
    CliffARobinson Posts: 1,416, Reputation: 101
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    #2

    Mar 12, 2012, 06:58 AM
    As shareholder value is difficult to influence directly by any manager, it is usually broken down in components, so called value drivers. A widely used model comprises 7 drivers of shareholder value, giving some guidance to managers:

    Revenue
    Operating Margin
    Cash Tax Rate
    Incremental Capital Expenditure
    Investment in Working Capital
    Cost of Capital
    Competitive Advantage Period
    Source

    Often, internal business plans reflect one or more of the 7 items above so that managers and executives are making decisions based on maximizing Shareholder Value and the bottom line.

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