Category Archives: Financial Policy

Indonesia in Southeast Asia: Moving up the Value Chain

INDONESIA IN SOUTHEAST ASIA: MOVING UP THE VALUE CHAIN

As Stern Value Management has done annually, this year we have looked at the wealth creation of the 100 largest Indonesian and 100 largest ASEAN (Association of Southeast Asian Nations) firms over the last 5 years. In order to measure wealth created by firms, we use the Wealth Added Index (WAI™), a methodology developed by Stern Stewart Read More Indonesia in Southeast Asia: Moving up the Value Chain

In Pursuit of Long-Term Sustainable Alpha

In Pursuit of Long-Term Sustainable Alpha

This article is an introduction to how companies can lay the foundation for long-term value creation. We will discuss three major steps they can take to achieve this goal. First, companies must develop a clear understanding of sustainable long-term value. Second, companies must have compensation plans that properly incentivize employees to create long-term value. Lastly, companies must attract investors Read More In Pursuit of Long-Term Sustainable Alpha

Financial Policy: What is the optimal capital structure and why does the debt level vary among industries?

Financial Policy: What is the optimal capital structure and why does the debt level vary among industries?

The objective of firm value maximization is at the heart of corporate financial theory. A company can create value through its operating, investment, and financing decisions. From the financing perspective, a firm can maximize its value by achieving the optimal mix of borrowed capital (debt) and equity; in effect, this optimal balance minimizes the firm’s Read More Financial Policy: What is the optimal capital structure and why does the debt level vary among industries?