Seminar%205%20%206%20per%20page - # of hours of study exam...

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1 ACCT3583 Management Accounting 2 Topic 5: Managing Shareholder Value and Relationships Administration ± Syndicate Case Study Report – Questions document and Prospectus on Blackboard. – Make sure your group has started planning! 2 ± Mid-Session Exam – ‘Allocation of venues’ document on Blackboard. – Information on format etc. next week. – Includes this weeks material. Course content overview External environment Lecture 1 Internal environment Lecture 2 Strategy Implementing Lecture 4 3 analysis & formulation Lecture 3 strategy via performance management Are we creating Shareholder Value? Lecture 5 Learning objectives (LOs) -by the end of the seminar you should… 1. Understand what shareholder value is and how it is created (Rappaport’s 10 principles) 2. Be aware of traditional accounting measures as they apply to shareholder value measurement 4 3. Understand contemporary approaches to shareholder value measurement and management: EVA SVA (Rappaport’s drivers of shareholder value) 4. Understand the limitations of these contemporary approaches 5. Understand why shareholders are often considered as the most important stakeholder Notes on readings ± Reading 5.1 – Ignore calculations pg 5.1.2 - 5.1.3 under the heading “EVA: Concepts and Limitations” – Focus on comparisons between EVA and other traditional accounting measures ± Reading 5.2 (all pages) – Ignore accounting practices not applicable in Australia 5 – Know the concepts but you only need to know calculations illustrated in seminars ! ± Reading 5.3 (p.19-30): – Know the concepts but not the calculations – Summary of Rappaport’s drivers of shareholder value ± Reading 5.4 – Focus on seminar content Seminar Format ± What is Shareholder Value? ± How do firms create Shareholder Value? Rappaport’s 10 ways to create Shareholder Value. 6 ± Traditional Measures of Shareholder Value. ± New Models of Shareholder Value – EVA TM – Economic Value Added – SVA – Rappaport’s Shareholder Value Analysis
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2 What is Shareholder Value? ± Created when firms earn returns that are greater than the cost of the capital – Dividends and capital gains 7 One contemporary Australian organization is trying to impress their shareholders …. . 8 How do firms create shareholder value? Rappaport’s 10 Ways to Create Shareholder Value ± P1: Do not manage earnings or provide earnings guidance ± P2: Make (all) strategic decisions that maximise expected value, even at the expense of lowering near-term earnings ± P3: Make acquisitions that maximise expected value, even at the expense of lowering near-term earnings ± P4: Carry only assets that maximise value ± P5: Return cash to shareholders when there are no credible value-creating opportunities to invest in the business.
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This note was uploaded on 09/14/2011 for the course ACCT 1001 taught by Professor John during the Spring '11 term at Renmin University of China.

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Seminar%205%20%206%20per%20page - # of hours of study exam...

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