Advanced Search
MyIDEAS: Login

Links Between Net Present Value and Shareholder Value from a Business Economics Perspective

Contents:

Author Info

  • Mária Illés

    ()
    (University of Miskolc)

Registered author(s):

    Abstract

    One of the oft-quoted theorems of finance is that decision making based on net present value will lead to the maximisation of shareholder value. The study analyses the reality background of this theorem within the disciplinary borders of business economics. Since finance is based directly on the bases of microeconomics, the study touches upon the presentation of the different disciplinary frames of business economics and microeconomics. The paper demonstrates that the economic content of shareholder value of a firm calculated from its business value and the project’s net present value fundamentally differ from one another. With their summing up, in general cases, no index emerges with meaningful economic content. Moreover, only in exceptional cases does the ranking based on the net present value lead to the maximization of the shareholder value.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://tmp.gtk.uni-miskolc.hu/volumes/2012/02/TMP_2012_02_05.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Faculty of Economics, University of Miskolc in its journal Theory Methodology Practice (TMP).

    Volume (Year): 8 (2012)
    Issue (Month): 02 ()
    Pages: 31-36

    as in new window
    Handle: RePEc:mic:tmpjrn:v:8:y:2012:i:02:p:31-36

    Contact details of provider:
    Email:
    Web page: http://www.gtk.uni-miskolc.hu/
    More information through EDIRC

    Related research

    Keywords: business economics; capital budgeting decisions; net present value; shareholder value;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:mic:tmpjrn:v:8:y:2012:i:02:p:31-36. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.