Excess Return: Difference between revisions
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imported>Doug Williamson (Typo correction 'performance' measure.) |
imported>Doug Williamson (Classify page.) |
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* [[Economic value added]] | * [[Economic value added]] | ||
* [[Market value added]] | * [[Market value added]] | ||
[[Category:The_business_context]] | |||
[[Category:Corporate_finance]] | |||
Revision as of 06:53, 22 January 2022
(ER).
A senior management performance measure which is based on the excess of the Actual wealth enjoyed by shareholders over the Expected wealth required by shareholders.
The Actual wealth of the shareholders is calculated from the market share price and the amounts and timing of cash dividends paid out to the shareholders.
The Required wealth of the shareholders is based on the amount and timing of their investment, and their required rate of return on investments of this company's level of risk.
