Redefining Shareholder Value: Demystifying the Valuation Myth


Measuring shareholder value has become crucial in the current economic environment, especially following the consistent pressure from institutional shareholders on companies to create shareholder value in an adverse economic environment. Maximizing the company’s value will make the company less appealing to hostile takeovers. Takeovers are a capital market mechanism designed to control the conflicts of interest between shareholders and managers of the company.
In this study, we will examine the best methods used in measuring shareholder value, and furthermore explore the process of shareholder value creation in the years prior and following the creeping takeover of Ivanhoe Mines by Rio Tinto Plc. We have based our study on data and ratio analytics from ThomsonONE (Reuters), information that is publicly available through press releases, analyst coverage, and financial news. Our study includes an in-depth analysis of the creeping takeover of Ivanhoe Mines by Rio Tinto Plc.


About the Author(s)

Mariana Schmid

Mariana Schmid has an international background in various industries. She has worked in the hedge funds industry in Switzerland and the Cayman Islands, and has gained mining and metals experience work…

Milan Frankl

Dr. Milan Frankl, MBA, PhD, is a professor of business with University Canada West’s School of Business, and an adjunct professor of bioinformatics at the University of Victoria. He …

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September 3, 2015





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