Graduate papers
  
Description of the graduate paper
Form of studies Master
Title of the study programm Business Finance
Title in original language Akcionāru kapitāla vērtības noteikšanas metodes biržā kotētajās Centrāleiropas un Austrumeiropas kompānijās
Title in English Shareholder Value Measuring for CEE Countries’ Listed Companies
Author Yuliia Fashchuk
Department Foreign Students Department
Scientific advisor Jūlija Bistrova
Reviewer Nadežda Koleda
Abstract Maximizing shareholder value is commonly held to be one of the fundamental goals of companies’ management throughout the world. For companies that consider shareholder value maximization as a principal objective of their business activities it is extremely important to identify performance measures that would allow accurate measurement of shareholder wealth and motivate employees and managers to create value. Research subject is shareholder value measurement. Research object is CEE countries’ listed companies. The aim of this research is the analysis of effectiveness of traditional and economic value-based performance measures for shareholder value measuring of CEE countries’ listed companies. Analysis of information contents of performance measures revealed that both traditional and economic value-based measures contain useful information for explaining shareholder value for all groups of CEE countries’ listed companies. In general, economic value-based measures were not found to be more efficient in terms of explaining shareholder value compared to traditional measures. The research, therefore, signifies the importance of combining both traditional accounting and economic value-based measures of performance for shareholder value measuring. Given the absence of a single opinion of researchers on the degree of association of traditional accounting and value-based measures with MVA or TSR, the present study provides a useful insight into understanding of measurement of shareholder value. Particularly, the study investigates the relationship between shareholder value and such performance measures like ROCE, CVA and CFROI, providing a substantial contribution to the existing limited research on this issue. Likewise, the present research attempts to fill the research gap in the area of implication of performance measures for measuring shareholder value of companies located in CEE. Finally, the study provides a composition of performance metrics for different groups of CEE countries’ listed companies based on the size of annual market capitalization that would ensure the most accurate reflection of shareholder value. The study consists of three parts. Analytical part provides the identification of the shareholder value creation measurement problem, discusses the implication of performance measures as well as the requirements of their appropriateness. This part also provides an overview of CEE stock market, discusses its major characteristics and principal differences from Western European stock market. In theoretical part, the historical background relating to the development of the concept of shareholder value is described. The comparison of shareholder and stakeholder value perspectives and the description of main shareholder value drivers are provided in the part. In addition, the matter of existing traditional and economic value-based measures as well as their advantages and limitations were discussed. The section also provides the comparison of traditional and economic value-based measures of shareholder value creation. Finally, scientific and practical part provides a description of research methodology, presents the results of the analysis of existing measures of shareholder value creation as well as discusses the effectiveness of economic value-based measures over traditional measures of corporate performance for shareholder value measuring for CEE countries’ listed companies. In addition, it presents the suggested composition of performance metrics for ensuring the most accurate reflection of shareholder value of listed companies located in Central and Eastern European region.
Keywords Shareholder value measurement, relative information content, incremental information content, performance measures
Keywords in English Shareholder value measurement, relative information content, incremental information content, performance measures
Language eng
Year 2016
Date and time of uploading 25.05.2016 17:30:54