Excess Return and Project analysis: Difference between pages

Revision as of 11:46, 3 August 2018

The evaluation and selection of projects which are most likely to maximise shareholders' wealth.

Also known as Project appraisal.

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-(ER).
+The evaluation and selection of projects which are most likely to maximise shareholders' wealth.
-A senior management peformance measure which is based on the excess of the Actual wealth enjoyed by shareholders over the Expected wealth required by shareholders.
+''Also known as Project appraisal.''
-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.
 == See also ==
-* [[Economic value added]]
+* [[Analysis paralysis]]
-* [[Market value added]]
+* [[Project appraisal]]