Valuation
Chapter One
Why Maximize Value?
Chief executives from North America to Europe and Asia may be forgiven if
they appear perplexed as they try to figure out how to lead their companies
following the tumultuous business evolution of the past decade. A 20-year
bull market in equities that began in 1980 carried nearly every company on
an upward spiral of wealth generation. Shareholders who reaped these rewards
cheered CEOs even as executives built up lucrative stock option packages
and in some cases attained rock-star celebrity status. By the time the
Internet frenzy peaked at the end of the 1990s, even staunch traditionalists
like Warren Buffett pondered whether the economy had entered a new era
of prosperity unbounded by traditional constraints. Some economists took
to questioning long-held tenets of competitive advantage, and "new economy"
analysts asked, with the utmost seriousness, why a three-year-old-money-losing
Internet purveyor of pet supplies shouldn't be worth more
than a billion dollars.
The subsequent market crash left aftershocks that have yet to be sorted
out as we prepare this book. The Internet, source of the dot-com fever, continues
to change the way we shop, communicate, and manage; but ... read full excerpt from Valuation: Measuring and Managing the Value of Companies ebook
