Investor Expectations in Value Based Management

Translated by Klementyna Dec and Weronika Mincer

  • Magdalena Mikołajek-Gocejna

Table of contents

  1. Front Matter
    Pages i-xvii
  2. Magdalena Mikołajek-Gocejna
    Pages 35-46
  3. Magdalena Mikołajek-Gocejna
    Pages 47-74
  4. Magdalena Mikołajek-Gocejna
    Pages 219-220

About this book

Introduction

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.

Keywords

Expectation Management Information Asymmetry Informational Efficiency Investor expectations Surplus Residual Income Value Based Management

Authors and affiliations

  • Magdalena Mikołajek-Gocejna
    • 1
  1. 1.Warsaw School of Economics Institute of Value ManagementWarszawaPoland

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-319-06847-3
  • Copyright Information Springer International Publishing Switzerland 2014
  • Publisher Name Springer, Cham
  • eBook Packages Business and Economics
  • Print ISBN 978-3-319-06846-6
  • Online ISBN 978-3-319-06847-3
  • About this book