Linkage of Management Decisions to Shareholder’s Value: EVA Concept

Shrikant Panigrahi, Yuserrie Bin Zainuddin and Noor Azlinna Binti Azizan
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Shrikant Panigrahi: PhD student, University Malaysia Pahang,Kuantan 26300, Malaysia
Yuserrie Bin Zainuddin: Professor, University Malaysia Pahang, Kuantan 26300, Malaysia
Noor Azlinna Binti Azizan: Professor, University Malaysia Pahang, Kuantan 26300, Malaysia

International Journal of Finance & Banking Studies, 2014, vol. 3, issue 1, 114-125

Abstract: In this paper, the author investigated the influence of management decisions like capital structure, dividend policies, remunerations, credit policy decisions and investment decisions on shareholder wealth maximization. The main objective of this paper is to increase awareness and relationship between management and shareholders of the companies.To achieve the objective, portfolio theory, capital asset pricing model and modern financial theory providing evidence on the linkage between management decisions to shareholder’s value. Shareholders are only concerned about the value of shares of the company and the amount of return in the form of dividend paid. Thus in order to meet the demands of the shareholders of the company, managers needs to increase their abilities and skills to overcome the organizational goals. Thus the main goal of this paper is to discuss on the role of management decisions towards increasing shareholder’s wealth and meet organizational goals.

Keywords: Management Decisions; Shareholder’s wealth maximization; capital asset pricing model; modern financial theory (search for similar items in EconPapers)
Date: 2014
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