NEW APPROACHES ON SHAREHOLDERS VALUE OF A FIRM

Abstract: The shareholder value concept reflects the tenets of modern financial theory. It is more meaningful than conventional, accounting-based approaches to valuation, but also more challenging. Its particular focus on risk and future potential demands a high level of forecasting and planning skills, and its application therefore requires great expertise and experience. Each company must be analyzed on its own merits in order to identify its individual opportunities for improvement. The increasing popularity of the shareholder value concept testifies to its superiority in communicating as well as analyzing corporate strategy. Its transparent methodology and open presentation of assumptions are major advantages. The clear objective of a long-term increase in value is key in creating value for all of a company's stakeholders through factors such as: cost leadership and differentiation, organization, strategic innovation, compensation and incentives, optimizing capital structure, financial engineering, communications. Key words: shareholders value, firm, capital structure 1