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Ten ways to create shareholder value (Rappaport, 2006) (1) Do not manage…
Ten ways to create shareholder value (Rappaport, 2006)
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2) Make strategic decisions that maximise expected value, even at the expense of lowering near-term earnings
Strategic analysis
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For selected strategy, how sensitive is value to changes in competition, technology life cycles, regulatory environment etc
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Corporate level
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Do any of the operating units have sufficient value-creating potential to warrant additional capital?
3) Make acquisitions that maximise expected value, even at the expense of lowering near-term earnings
Focus on prospects for creating value, not immediate 'earnings per share' impact
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5) Return cash to shareholders when there are no credible value-creating opportunities to invest in the business
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8) Reward middle managers and frontline employees for delivering superior performance on the key value drivers that they influence directly.
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