In both finance and accounting, the Return On Equity (ROE) is considered a biased indicator of economic profitability. Opposing this view, this paper shows that an appropriate mean of ROEs signals shareholder value creation. This implies that the notion of Market Value Added may be replaced by...

Only 25 companies out of 136 had negative return in January-September 2009 (133 in 2008). The 136 companies created value in January-September 2009 (64 billion euros), but destroyed value in 2008 (420 billion euros) and in 2007 (17 billion euros). The average return of the 136 companies was 24%...

Only 36 companies out of 125 had negative return in 2009 (133 out of 136 in 2008). The companies created value in 2009 (100 billion euros), but destroyed value in 2008 (420 billion euros) and in 2007 (17 billion euros). The average return of the 125 companies was 30% in 2009 and -40% in 2008

Only 23 Spanish companies out of 125 had positive return in 2010. The companies destroyed value for their shareholders in 2010 (155 billion euros), created value in 2009 (100 billion euros), and also destroyed value in 2008 (420 billion euros) and in 2007 (17 billion euros). The average return...

Many managers are caught in a dilemma: between a desire to maximize the value of their companies and the demands of "stakeholder theory" to take into account the interests of all the stakeholders in a firm. The way out of the conflict lies in a new way of measuring value. The purpose of this...

This paper introduces a new approach for measuring shareholder value creation (called adjusted economic profit (EP)) which combines the advantages of both EP and APV (adjusted present value) methods. In particular, the shareholder value creation over a period is derived as the sum of two...

Since a regulatory change in 1982, stock buybacks- the action of companies purchasing their own stock- have become an increasingly popular use of cash amongst publicly traded companies, eclipsing dividend payments and rivaling capital expenditure. The merits of conducting large-scale buyback...

We examine the effects of incorporating a potential tax on carbon emissions into a value investment strategy. We show that in a portfolio optimization problem, a carbon tax at the stock level is mathematically equivalent to a carbon constraint at the portfolio level. Using this insight we derive...

We compute the Shareholder Value Creation of Santander, BBVA, Popular and Bankinter between 1991 and 2010. The shareholder value creation during this period was: Santander -24 billion euros; BBVA -22; Popular 1.6 and Bankinter 0.6.The average shareholder return was: Santander 12.7%; BBVA 11.5%;...

In the period 1991-2010, the S&P 500 destroyed value for the shareholders ($4.5 trillion). In 1991-1999 it created value ($5.1 trillion), but in 2000-2010 it destroyed $9.6 trillion. The market value of the S&P 500 was $2.8 trillion in 1991 and $11.4 trillion in 2010.We also calculate the...