Shareholder value

Shareholder value is used to refer many things. They are often used to refer the market capitalization of a company. They may also be used to refer the concept that indicates the primary goal of company which is enriching its shareholders by paying dividends and increasing the stock price. It also refers to a concept that says that planned actions by management and the returns to shareholders should surpass several bench-marks. The term is introduced by Alfred Rapport. He has mentioned this term in his book which is called Creating Shareholder Value.

Shareholder Value is a part of the capitalization for a publicly traded company. The shareholder value will generally be augmented by dividends and it can be lowered by issuing shares. There is a management principle known as shareholder value maximization. According to this principle, for any business the interest of the shareholders should be the primary concern. They should take business decisions only based on the interests of the share holders.

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