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?

E

Expert

Verified

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.

   Related Questions in Corporate Finance

  • Q : What repercussions do variations in

    What repercussions do variations in the oil price have on the value of a company?

  • Q : What is the required rate of return on

    Woidtke Manufacturing's stock currently sells for $29 a share. The stock just paid a dividend of $2.50 a share (i.e., D0 = $2.50), and the dividend is expected to grow forever at a constant rate of 9% a year. What st

  • Q : What are the different types of

    What are the different types of mathematics found in quantitative finance?

  • Q : Data races-critical sections-processor

    A) Research the phenomena of data races. Give an illustration of how an unprotected data race can give mount to data inconsistency.How do OpenMP and Cilk resolve this problem? B) Present your own fully documented and tested program

  • Q : What is nonlinearity in option pricing

    What is nonlinearity in option pricing model?

  • Q : Explain investment of bank for

    When my company is not listed, therefore the investment banks apply an illiquidity premium. In fact, they say this is an illiquidity premium but then they call this a small cap premium. Only one of the banks, apparently based upon Tit

  • Q : Leverage ratio problem Handy Inc has

    Handy Inc has debt-to-assets ratio of 40%, tax rate of 35%, and total value of $100 million. W. C. Handy, the CFO, would like to increase the leverage ratio to 42%, and he believes that there will be no change in the bankruptcy cost of the company. How many dollars wo

  • Q : Who explained the high-peak/fat-tails

    Who explained the high-peak/fat-tails?

  • Q : Is it possible to use a constant WACC

    Is this possible to use a constant WACC in the valuation of a company along with a changing debt?

  • Q : Calculate a positive net income for a

    Is this possible for a company with a positive net income and that does not distribute dividends to get itself in suspension of payments?

©TutorsGlobe All rights reserved 2022-2023.