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?
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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.
When valuing the shares of my company, I calculate the present value of the expected cash flows to shareholders moreover I add to the result obtained cash holdings and liquid investment. Is that correct?
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