What are the benefits of a long-term perspective on value creation? For companies? For the economy?
Answer to relevant QuestionsWhat is the relationship between the stock market and the real economy in terms of measures such as gross domestic product (GDP), inflation, and interest rates? What more could be done by boards of directors and shareholders to ensure that managers pursue long-term value creation? What is the conservation of value principle? Provide some examples of where it might apply. If a company performs perfectly in line with expectations, how will its TRS react in theory? How will its TRS react in practice? Why? 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.
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