Investor Expectations in Value Based Management [electronic resource] : Translated by Klementyna Dec and Weronika Mincer /
Mikołajek-Gocejna, Magdalena.author.
Understanding the process of shaping investor expectations is essential to describe and predict changes in the value of assets on the financial markets, especially stock prices on the capital markets, and thus the value of companies listed on them. The main objective of this book is to include the investor expectations in the concept of enterprise value management and measurement of shareholders value creation. It seems that the role of expectations, as a determinant of investment decisions on the capital market, requires a deep insight and highlight the importance of managing the expectations for creating value for shareholders, in particular in the context of the financial crisis of 2007-2009. Creating value for shareholders is to overcome investor expectations for the rate of return on their initial investment. That means that managers must understand how investors build their expectations. According to studies conducted by T. Copeland and A. Dolgoff'a there is a strong and statistically significant relation between the shareholders returns and the two types of variables: changes in expectations for the future earnings and changes in the level of interference of provided information. Almost 50% of the variance of return rates can be explained by these two variables. Studies have also shown that changes in expectations for long-term profits have a significant and immediate impact on the share price. Readers of this book will be able to understand the process of investor expectation formulation, will know how to create value in response to investor expectations and how to consciously shape investor expectations in order to increase company value.
Description based upon print version of record.
Includes bibliographical references at the end of each chapters.
High Uncertainty of Companies' Operations Versus Value Creation in VBM Systems -- Expectations in the Theory of Economics -- Investors' Expectations -- Creation of Investors' Expectations - the Role of Investor Relations and Company Information Policy -- Including Investors' Expectations in the Concept of Value Based Management -- Information Asymmetry and the Problem of Informational Efficiency on Capital Markets -- Information Asymmetry Versus Investors' Expectations and Creating Shareholder Value in Companies Listed on the Warsaw Stock Exchange -- Conclusions.
Understanding the process of shaping investor expectations is essential to describe and predict changes in the value of assets on the financial markets, especially stock prices on the capital markets, and thus the value of companies listed on them. The main objective of this book is to include the investor expectations in the concept of enterprise value management and measurement of shareholders value creation. It seems that the role of expectations, as a determinant of investment decisions on the capital market, requires a deep insight and highlight the importance of managing the expectations for creating value for shareholders, in particular in the context of the financial crisis of 2007-2009. Creating value for shareholders is to overcome investor expectations for the rate of return on their initial investment. That means that managers must understand how investors build their expectations. According to studies conducted by T. Copeland and A. Dolgoff'a there is a strong and statistically significant relation between the shareholders returns and the two types of variables: changes in expectations for the future earnings and changes in the level of interference of provided information. Almost 50% of the variance of return rates can be explained by these two variables. Studies have also shown that changes in expectations for long-term profits have a significant and immediate impact on the share price. Readers of this book will be able to understand the process of investor expectation formulation, will know how to create value in response to investor expectations and how to consciously shape investor expectations in order to increase company value.
Finance.
Macroeconomics.
Economic theory.
Finance, general.
Macroeconomics/Monetary Economics//Financial Economics.
Economic Theory/Quantitative Economics/Mathematical Methods.