Difference between capitalization and their book value
Is the difference for the value creation in a company among the market value of the shares (capitalization) and their book value a good measure since its foundation?
Expert
No. Value creation in an era is the difference between the return to shareholders and the needed return multiplied by the capitalization at the starting of the period.
The part of the net income which is not distributed to shareholders goes to reserves (to shareholders’ equity). As dividends shows real money, reserves are real money as well. Is it true?
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