Shareholder Value


Definition: Shareholder Value is the amount of money that is left after all creditors of a firm are paid within the appropriate period.
It is the value of the company minus the future claims (debts).
SV is also is the total return to the stockholders in terms of both dividends and share price growth.
SV is created by earning a Rate of Return on invested capital that exceeds the WACC of the company.
Can be calculated by taking the Net Present Value of all future free cash flows, adding the value of non-operating assets, and subtracting all future claims (debts).


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