Question: Given that TRS is not a clean measure of management
Given that TRS is not a clean measure of management performance and is therefore a flawed basis for management compensation, how should a company gauge management performance? What measures should it use?
Answer to relevant QuestionsWhat is the expectations treadmill and how does it affect managers’ ability to deliver above-average TRS over long periods of time? From a value-creation perspective, is it more important for a company to know where to compete or how to compete? That is, is it more important to play in the right markets or to be the best player in your current markets? For which type of company is additional growth likely to create more value: a high-ROIC company in a mature market or a low-ROIC company in a fast-growing market? Give reasons for your answer. Using free cash flow computed in Question 1 and the weighted average cost of capital computed in Question 2, estimate BrandCo’s enterprise value using the growing-perpetuity formula. Assume free cash flow grows at 5 ...Using the reorganized financial statements created in Question 4, what is the free cash flow for HealthCo in the current year?
Post your question