Shareholder’s value model

Share price of company is determined at the stock exchange where investors buy and sell shares. It is necessary to determine what criteria the investor appeals to while choosing the shares of one or other company. The priorities of individual owners may differ. Therefore, it is a complex task to find a united function of availability. In this situation, the maximization of share price is an acceptible goal for the most of investors. The question concerning the major elements for the evaluation of asset owned by shareholders is raised. The aim of the study is to create the model for the measurement of value possessed by shareholders using the key factors which affect the value. The article was prepared using the combination of descriptive - theoretical and empirical - analytical methods. The process on determination of the value possessed by shareholders can be divided into three main phases: determination of value of shares, calculation of company value and calculation of value possessed by shareholders. The value possessed by shareholders depends on the full set of external and internal factors which determine the value. Influence of individual factors on value is different. The model described in the article helps to identify the most significant financial ratios. The sampling is performed through the examination between the value owned by shareholders on the market and the selected financial ratio of respective period. Following the impact of each ratio on the value, it is possible to create a multipartite regression equation for forecasting the value of shares. The value obtained by shareholders is got by adding revised value to the company value. The empirical research showed that a combination of financial indicators reflects the price of company share better and hence the value owned by shareholders than any of the studied single financial indicator