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On the maximization of shareholders' wealth: Evidence based on firm-specific financial characteristics

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  • Martikainen, Teppo

Abstract

This paper focuses on the long-term firm-specific determinants of stock returns. The main goal of the investigation is to show which of the financial characteristics of a firm its management should concentrate on, when maximizing the wealth of the common shareholders. It is found that profitability, financial leverage, operating leverage and growth are important long-term determinants of firm value in the Finnish stock market. However, significant differences are observed between the measures applied to the same presumptive characteristics of the firm.

Suggested Citation

  • Martikainen, Teppo, 1992. "On the maximization of shareholders' wealth: Evidence based on firm-specific financial characteristics," Scandinavian Journal of Management, Elsevier, vol. 8(1), pages 15-38.
    • Handle: RePEc:eee:scaman:v:8:y:1992:i:1:p:15-38
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