Economics, Econometrics and Finance
3 years ago

New method reveals true shareholder value creation in project investments!

1 view
SSRN Electronic Journal
Internal Rates of Return and Shareholder Value Creation
Carlo Alberto Magni

Paper Summary

The article discusses a new way to evaluate projects by looking at their average Return On Investment (ROI) compared to the cost of capital. They found that a project's average ROI is related to the average Return On Equity (ROE) and Return On Debt (ROD). This approach helps measure shareholder value creation accurately, even when the cost of capital changes over time.

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