Chapter 5 Earnings-Based Value
Measurement Need
Earnings are affected by many factors, including marketing investments. Understanding the mechanics of earnings-based value will help marketers recognize the connection between their marketing activities and company earnings. This is important for publicly-traded companies since shareholders want the value of their investment to increase, and earnings are instrumental in determining share price.
Solutioni
Publicly-traded companies are evaluated on the performance of their stock, since it is a direct measure of value creation (or destruction) for investors. Earnings-based value is a series of calculations that help assess the value of a company and, indirectly, suggests the impact of product ...
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