Financial Management, 12th Edition by Pearson

CHAPTER 35

Shareholder Value and Corporate Governance

LEARNING OBJECTIVES

• Explain the need for a linkage between the financial goals and strategy.
• Illustrate the shareholder value creation with an example.
• Develop a framework for the shareholder value analysis.
• Discuss the concept and measurement of economic value added (EVA) and market value added (MVA).
• Explain the significance of balanced scorecard as a ­comprehensive performance system.
• Highlight the features of good corporate governance.

INTRODUCTION

The theory of finance has undergone fundamental changes over the past three decades or so. Finance is no more a descriptive discipline; it is now viewed as a specialized branch of applied microeconomics, and the emphasis now is on the ...