Shareholders’ Value Creation and Market Price of Share: A Study in Indian Context
Journal Title: MUDRA: Journal of Finance and Accounting - Year 2017, Vol 4, Issue 1
Abstract
Shareholders’ value creation has become a matter of concern in the world of financial management in recent times. Shareholders’ value creation refers to the net value addition for the shareholders. In the present corporate scenario, financial managers do not concentrate only on profit generation but also on value creation for their shareholders, to ensure the survival of the business in the long run. It has been observed that shareholders’ value creation is related to market price of share. In this paper, an attempt has been taken to measure shareholders’ value creation by five different approaches selecting few sample companies. The approaches are- Market Value to Book Value Ratio approach, Economic Value Added (EVA) approach, Market Value Added (MVA) approach, Shareholders’ Value Added (SVA) approach and Shareholders’ View Point approach. Further, we quantify the degree of association that exists between shareholders’ value creation and market price of share. The data analysis reveals that shareholders’ value per share and market value per share are positively correlated to a considerable extent.
Authors and Affiliations
Radhagobinda Basak
Keywords
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- EP ID EP623346
- DOI 10.17492/mudra.v4i01.9781
- Views 244
- Downloads 0
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