The Appropriateness of Shareholder Value Analysis of BetFair Company Value Assessment

Feb 3rd, 2012
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Shareholder Value Analysis (SVA) is a technique employed in company valuation that depends upon the returns issued to its shareholders. The main assumption in SVA is that the director’s role is to maximize the income of the company shareholders. This assumption is supported by the notion that discounted cash flow principle is applicable for the whole business.

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Shareholder Value Analysis of BetFair's Company Value AssessmentBy Student's NameCourseProfessorUniversityDepartmentDateThe Appropriateness of Shareholder Value Analysis of BetFair Company Value AssessmentShareholder Value Analysis (SVA) is a technique employed in company valuation that depends upon the returns issued to its shareholders. The main assumption in SVA is that the director's role is to maximize the income of the company shareholders. This assumption is supported by the notion that discounted cash flow principle is applicable for the whole business. SVA is employed to effectively manipulate company strategies into cash flow; this however can only be achieved if the analysis is linked to alternative company strategies. Most business analysts believe that SVA is the most effective means of analyzing financial implications of company strategies. As such, it has been regarded as the decade's greatest asset in corporate planning. SVA has helped numerous companies realize success like Dexter, Trinova and Westinghouse. SVA has been endorsed by financial theorists, which has led to the creation of consulting firms based on its applicability to a wide range of businesses. SVA is also plagued by some detractors; the most evident being the operating managers of the subject company. Operating managers are normally less impressed with SVA because of its restrictive assumptions and complexities that make them feel victimized. Furthermore, operating manager

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