What more could be done by boards of directors and shareholders to ensure that managers pursue long-term value creation?
Answer to relevant QuestionsExplain the conservation of value principle. What decisions might it affect? Why does organic growth often create more value than growth from acquisitions? Describe how different types of organic growth might create different amounts of value. What are the potential reasons why TRS over short periods of time may not reflect the actual performance of a company and its management? Explain the difference between ROICs excluding and ROICs including goodwill for U.S. companies: what does this difference imply and why has it increased so much over the past decade? Exhibit 6.18 presents the income statement and reorganized balance sheet for BrandCo, an $800 million consumer products company. Using the methodology outlined in Exhibit 6.5, determine NOPLAT for year 1. Assume an operating ...
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