Over the past 40 years there has been a progressive and huge divergence between company balance sheet value and value expressed by shareholders, represented by share price and market capitalisation.
Furthermore, the statistical correlation between accounting-based measures of performance over a one- to three-year time horizon and corporate share value is poor.
This module looks at the real driving forces behind share values in today’s world.
On completion of this course, you will gain an understanding of:
- the shortcomings of historical valuation methods
- the basics of the capital asset pricing model
- market value added (MVA) and economic value added (EVA) - a step forward
- shareholder value analysis (SVA) - current thinking on value creation and the importance of intangible value
- Rappaport’s guiding principles of value management.