On the maximization of shareholders' wealth: Evidence based on firm-specific financial characteristics

Teppo Martikainen

Scandinavian Journal of Management, 1992, vol. 8, issue 1, 15-38

Abstract: This paper focuses on the long-term firm-specific determinants of stock returns. The main goal of the investigation is to show which of the financial characteristics of a firm its management should concentrate on, when maximizing the wealth of the common shareholders. It is found that profitability, financial leverage, operating leverage and growth are important long-term determinants of firm value in the Finnish stock market. However, significant differences are observed between the measures applied to the same presumptive characteristics of the firm.

Keywords: Maximization; of; shareholders'; wealth; stock; returns; firm-specific; financial; variables (search for similar items in EconPapers)
Date: 1992
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