Enhance Shareholder Value Research Articles

Analysing the Stock Performance of DLF in the Face of the Pandemic: A Study on Risk, Return, and Market Correlation

This study investigates the stock performance of DLF Ltd., a prominent player in the Indian real estate sector, in three distinct phases: pre-pandemic (March 2019 to March 2020), during the pandemic (March 2020 to March 2022), and post-pandemic (March 2022 to September 2024). Using monthly historical stock prices of DLF, the SENSEX, and the BSE Realty Index, collected from the BSE website, this research applies mean-variance analysis to assess the risk and return characteristics of DLF’s stock during these periods. Additionally, correlation and regression analyses are conducted to explore the relationship between DLF’s stock returns and the broader market indices, with a particular focus on the BSE Realty Index, given its relevance to the real estate sector. The study reveals the significant impact of the COVID-19 pandemic on the real estate market, especially on stocks like DLF, which experienced heightened volatility during the pandemic. The pre-pandemic phase reflected stable growth, while the pandemic period saw a sharp decline in stock returns due to market uncertainty and economic downturns. However, the post-pandemic phase witnessed a robust recovery, with DLF’s stock aligning closely with the recovery trends in the real estate sector, as indicated by its correlation with the BSE Realty Index. This paper aims to provide valuable insights into the stock performance of DLF in relation to macroeconomic factors and sector-specific trends, offering an understanding of how the company’s performance has evolved to enhance shareholder value across these three critical phases. The findings offer implications for investors and stakeholders in assessing the resilience and potential of real estate stocks in times of crisis and recovery.

Navigating the financial frontier: a case of investment decision-making in the wake of Reliance Industries Limited’s demerger

Learning outcomes This case study aims to equip students with the skills to evaluate the rationale behind a demerger decision, derive the enterprise value and equity value of the conglomerate using the discounted cash flow valuation modelling and assess the company’s value based on qualitative parameters using economy industry company analysis and strengths, weaknesses, opportunities and threats analysis. Case overview/synopsis This case study delves into the demerger of the financial services arm of Reliance Industries Limited into a separate unit named Jio Financial Services Limited. The independence of this unit is anticipated to enhance shareholder value and unlock the conglomerate discount. In light of these factors, a fundamental analysis of the firm is conducted to determine whether it presents a viable investment opportunity. Complexity academic level This case study is suitable for -graduate and postgraduate courses in financial management. Supplementary materials Teaching notes are available for educators only. Subject code CSS 1: Accounting and finance.

Interpretable machine learning model for predicting activist investment targets

This research presents a predictive model to identify potential targets of activist investment funds—entities that acquire significant corporate stakes to influence strategic and operational decisions, ultimately enhancing shareholder value. Predicting such targets is crucial for companies aiming to mitigate intervention risks, activist funds seeking optimal investments, and investors looking to leverage potential stock price gains. Using data from the Russell 3000 index from 2016 to 2022, we evaluated 123 model configurations incorporating diverse imputation, oversampling, and machine learning techniques. Our best model achieved an AUC-ROC of 0.782, demonstrating its capability to effectively predict activist fund targets. To enhance interpretability, we employed the Shapley value method to identify key factors influencing a company’s likelihood of being targeted, highlighting the dynamic mechanisms underlying activist fund target selection. These insights offer a powerful tool for proactive corporate governance and informed investment strategies, advancing understanding of the mechanisms driving activist investment decisions.

Corporate culture and shareholder litigation rights: evidence from a quasi-natural experiment and textual analysis

PurposeTaking advantage of an innovative measure of corporate culture obtained from advanced machine learning and textual analysis, we investigate how corporate culture is influenced by shareholder litigation rights, which are widely recognized as a crucial external governance mechanism. The innovative measure of corporate culture is based on a textual analysis of over 200,000 earnings call transcripts.Design/methodology/approachTo mitigate endogeneity and thus demonstrate causality, we exploit a quasi-natural experiment based on the staggered passage of universal demand laws, which reduce shareholder litigation rights. The enactment of state-level legislation is likely exogenous to individual firms’ characteristics as it is beyond the control of any given firm. Following the literature, we employ a difference-in-difference analysis, supplemented by several robustness checks, i.e. propensity score matching and entropy balancing.FindingsOur difference-in-difference estimates show that an exogenous reduction in shareholder litigation rights weakens corporate culture considerably. Specifically, corporate culture is 12.74–14.41% weaker after the implementation of universal demand laws. Our results corroborate the hypothesis that a decline in litigation risk exacerbates agency problems, discouraging self-interested managers from taking actions that enhance shareholder value in the long run, such as cultivating a strong corporate culture.Originality/valueOur study is the first to explore how corporate culture is affected by shareholder litigation risk, which constitutes a vital external governance mechanism. Moreover, we utilize an innovative measure of corporate culture based on sophisticated textual analysis. Finally, we employ a quasi-natural experiment based on an exogenous shock, making it more likely that our conclusion reflects a causal influence rather than merely a correlation.

Corporate Governance and Shareholder Value: A Meta-Analysis

Corporate governance is a critical determinant of shareholder value, influencing the effectiveness of management, transparency, and overall corporate performance. This article presents a meta-analysis of existing research on the relationship between corporate governance practices and shareholder value, synthesizing findings from a wide range of studies across different industries and geographical regions. The meta-analysis aims to identify the key governance mechanisms that consistently contribute to enhanced shareholder value, such as board structure, executive compensation, ownership concentration, and regulatory compliance. By analyzing these factors, the study provides a comprehensive overview of how corporate governance frameworks can drive firm performance and protect shareholder interests. The findings highlight that robust corporate governance practices are strongly associated with higher shareholder returns, reduced agency costs, and improved market confidence. Additionally, the study examines the contextual factors, such as legal environments and market maturity, that may influence the effectiveness of governance mechanisms. The article concludes by discussing the implications for policymakers, investors, and corporate leaders, emphasizing the importance of tailoring governance practices to the specific needs and challenges of individual firms. The meta-analysis underscores the value of strong governance structures in achieving sustainable long-term growth and maximizing shareholder value.

Assessing the Effectiveness of Mergers and Acquisitions in Fueling Business Growth

In the contemporary business landscape, mergers and acquisitions (M&As) have become crucial strategies for companies aiming to drive growth and enhance their competitive positioning. This research article provides a comprehensive assessment of the effectiveness of M&As in fueling business growth, examining a range of factors that influence M&A outcomes. Through a mixed-methods approach, integrating both quantitative and qualitative analyses, the study explores the impact of strategic alignment, integration processes, and cultural compatibility on M&A success. Findings reveal that while M&As offer significant potential for revenue growth and market expansion, their success is contingent upon well-executed integration and alignment with strategic goals. The study highlights the importance of clear communication, effective management of cultural differences, and proactive stakeholder engagement in achieving favorable financial outcomes and enhancing shareholder value. The research offers valuable insights for both academics and practitioners, emphasizing the need for strategic foresight and comprehensive planning in M&A activities.

Stewardship code adoption and firms’ decisions on treasury shares: Evidence from South Korea

This study examines the relationship between institutional blockholders’ stewardship code adoption (the stewardship code adoption) and firms’ treasury-share-related decisions. Using the data of firms listed on the Korea Exchange from 2017 to 2019, this study finds that the stewardship code adoption has a negative relationship with share repurchase and a positive relationship with treasury share cancellation, and that the negative relationship between the stewardship code adoption and share repurchase is more pronounced for institutional blockholders with long-term investment stance. In addition, this study further finds that the stewardship code adoption can affect the timing of firms’ decisions on treasury share cancellation, reducing the risk from long-term holding or opportunistic disposition of treasury shares. The results from this study implies that the increase in shareholder activism triggered by the stewardship code adoption is to enhance shareholder value.

Climate change, tax avoidance, and shareholder value: Evidence from the Paris Agreement

AbstractMotivated by the rapidly emerging literature on climate change and finance, we explore the effect of corporate tax avoidance on shareholder value around the adoption of the Paris Climate Agreement. Companies engaging in greater tax avoidance experience significantly more favorable stock market reactions. Companies that achieve greater savings through tax avoidance have a larger surplus of resources that can be directed toward climate‐related actions in alignment with the Paris Agreement, resulting in enhanced shareholder value. Furthermore, the advantageous impact of tax avoidance on shareholder wealth is significantly less pronounced for companies that pay out larger dividends.

THE INVESTMENT PATTERN AND BANKING NEEDS OF THE HOUSING SOCIETIES.

THE INVESTMENT PATTERN AND BANKING NEEDS OF THE HOUSING SOCIETIES THE INVESTMENT PATTERN AND BANKING NEEDS OF THE HOUSING SOCIETIES. UNDER THE GUIDANCE OF Prof. Reji john SOB, GALGOTIAS UNIVERSITY SUBMITTED BY Bineet yadav 22GSOB2010640 MBA 2022-2024 SCHOOL OF BUSINESS GALGOTIAS UNIVERSITY ABSTRACT This study delves into the investment patterns and banking requirements of housing societies, examining their financial management practices for sustainability and growth. Through a comprehensive analysis of market dynamics, company performance, risk assessment, valuation methods, investment strategies, and portfolio management, this research aims to provide insights into effective financial decision-making within the housing society sector. • Market Analysis: The market analysis section explores the macroeconomic factors influencing the housing society sector, including demographic trends, urbanization rates, regulatory environment, and economic indicators. It assesses the demand for residential properties, rental yields, and competition among housing societies. Additionally, it examines the impact of market volatility and economic cycles on investment decisions within the sector. • Company Analysis: Company analysis focuses on the financial performance and operational efficiency of housing societies. It evaluates key metrics such as revenue growth, profit margins, asset utilization, and liquidity ratios to assess the financial health of individual housing societies. Furthermore, it examines governance structures, management capabilities, and strategic initiatives undertaken by housing societies to enhance shareholder value and mitigate risks. • Risk Assessment: Risk assessment involves identifying and evaluating various risks inherent in investing in housing societies. These risks may include market

A STUDY ON CASH MANAGEMENT AT TIFSCO PVT LTD.,

Cash, the undeniable lifeblood of any business, underpins its daily operations, future growth, and overall financial health. Effective cash management practices ensure a company's ability to meet its financial obligations, seize opportunities, and navigate economic uncertainties. This research project delves into the multifaceted world of cash management, analyzing its core principles, exploring its objectives, and evaluating its impact on a company's success. At its core, cash management strives to strike a delicate balance between maintaining adequate liquidity and maximizing profitability. Holding excessive cash reserves ensures smooth operations and the ability to meet short-term liabilities. However, this idle cash represents lost earning potential. Conversely, holding insufficient cash reserves can lead to missed opportunities, payment delays, and potential financial distress. Understanding the factors that influence this balance is crucial for developing effective cash management strategies. Financial theory has identified several key motives for holding cash, each with its own implications for management. The transaction motive necessitates maintaining a cash buCash management, though seemingly straightforward, is a complex and critical function for businesses of all sizes. By understanding the motives for holding cash, aligning objectives with strategies, and utilizing innovative tools, companies can optimize their cash flow and unlock new avenues for growth and success. This research project aims to contribute to a deeper understanding of cash management and its role in driving overall financial well-being.ffer to meet daily operational needs. The precautionary motive focuses on holding cash reserves to mitigate unforeseen events or fluctuations in cash inflows. Finally, the speculative motive involves strategic cash holdings to take advantage of profitable investment opportunities. Analyzing a company's specific industry, risk profile, and growth objectives allows for a tailored approach to balancing these motives. Effective cash management prioritizes several key objectives. Maximizing liquidity ensures the ability to meet current obligations without disruption. Optimizing cash balances minimizes idle cash reserves, thereby maximizing potential returns from alternative investments. Accelerating collections through efficient receivables management ensures timely inflows of cash. Streamlining payments by optimizing disbursement processes reduces unnecessary costs and ensures efficient cash utilization. Finally, forecasting cash flows with accuracy allows for proactive planning and mitigates the risk of shortfalls. Strong cash management practices significantly contribute to a company's financial performance. Improved liquidity fosters business continuity and financial stability. Efficient cash utilization reduces dependence on external financing and improves profitability. Additionally, proactive cash flow management allows companies to capitalize on advantageous investment opportunities, further enhancing shareholder value. This research project will explore cash management practices in detail. It will examine various techniques for forecasting cash flows, managing receivables and payables, and optimizing short-term investments. The study will also delve into the impact of technological advancements on cash management practices. Additionally, the research will analyze the effectiveness of cash management strategies across different industries and company sizes.

Enhancing the Appeal: Impact of Economic Value, Market Value, Return Equity, and Total Assets Turnover on Stock Prices

This research aims to determine the influence of economic value added, market value added, return on equity, and total asset turnover on stock prices. The population in this study was companies that were included in the LQ45 index, and the companies selected as research samples were 22 companies. The sampling technique uses a purposive sampling technique. Data were analyzed using descriptive statistical analysis, classical assumption tests, multiple linear regression analysis, and hypothesis testing using the t-test and determination test. The research results show that partial economic value added and total asset turnover do not affect stock prices; market value added has a positive and significant effect on stock prices, while return on equity has a negative and significant effect on stock prices. Managerial implications, emphasizing the significance of enhancing economic value, market value, ROE, and total assets turnover to drive stock price performance. Managers should focus on strategies that improve these metrics and enhance shareholder value and market competitiveness. Understanding the interplay between economic values. Total assets turnover is vital for effective managerial decision-making in the stock market realm. This study delves into the implications of these factors on stock prices for managers navigating the complexities of financial markets

Indonesia Insurance Corporate Governance: A Literature Review

The aim of this research is to present and evaluate corporate governance framework for insurance companies in Indonesia based on previous researches related to corporate governance and The Indonesia Financial Services Authority Regulation. We evaluate concerning to governance objectives that include protecting shareholder interests, enhancing shareholder value, ensuring accountability, managing risk, promoting ethical behavior, transparency and disclosure, balancing interests, strategic decision-making, compliance with laws and regulations, efficient operations, long-term sustainability, stakeholder engagement, adapting to change, creating a positive reputation, and facilitating investment. We discuss the corporate governance framework for insurance companies in Indonesia based on the Indonesia Financial Services Authority regulation that states governance structure, corporate governance code, self-assessment & governance report, governance process and corporate governance principles to meet governance objectives. Although every year all insurance companies report corporate governance, but some companies have been stopped by the Authority. This raises research problems for the future relating to why insurance companies that have complied with corporate governance provisions have been stopped by the Authority.

Symbiotic Relationship between Capital Budgeting and Financing Decision-Making

This study aims to explore the symbiotic relationship between capital budgeting and financing decision-making in corporate financial management. The research design and methodology involve a comprehensive literature analysis, incorporating seminal theories and recent empirical studies to elucidate the interconnectedness of investment choices and funding strategies. Findings indicate that effective coordination between capital budgeting and financing decisions is essential for firms to optimize resource allocation, manage financial risks, and enhance shareholder value. Strategic capital allocation enables firms to prioritize investments that offer the highest potential for value creation while aligning investment decisions with financing considerations, which ensures efficient use of financial resources. The implications of this research suggest that integrating capital budgeting and financing decision-making enables firms to navigate dynamic market conditions, adapt to regulatory changes, and capitalize on emerging opportunities. By addressing these research gaps, scholars can better understand the factors driving firms' strategic planning and value-creation initiatives.

Value relevance of multifaceted corporate social performance: how do country-specific factors matter?

This study examines the relationship between multidimensional corporate social performance (CSP) and shareholder value, considering the moderating impacts of country-specific factors: economic development, the political system, and culture. Based on a sample of public companies in Asian-Pacific emerging countries over the 2010–2020 period, the findings reveal that the aggregate CSP measure obscures the valuation effect, whereas individual CSP dimensions highlight positive valuation effects. The CSP valuation effect varies across dimensions aimed at different stakeholder groups. Notably, narrowly focused CSP dimensions (community, product responsibility, and workforce) demonstrate more pronounced valuation effects than broadly focused dimensions (human rights). Given CSP’s multifaceted nature, directing attention toward the aggregate measure or incorrect dimensions may yield unwarranted conclusions. To enhance shareholder value through CSP, importance-performance analysis suggests prioritized resource allocation to human rights, community, product responsibility, and workforce dimensions. Intriguingly, the positive valuation effect of CSP is amplified in countries with higher income-per-capita and lower corruption, indicative of economic development and a robust political system, respectively. However, humane orientation—a cultural proxy—exerts no moderating impact on the CSP-shareholder value relationship. Comprehending the moderating roles of country-specific factors bears significant implications for bolstering CSP across diverse global regions.

JK Tyre Product Matrix

At its core, JK Tyre’s philosophy embodies a relentless focus on enhancing shareholder value and upholding the highest standards of ethical business conduct. The Company’s unwavering commitment to these ideals is reflected in its comprehensive Code of Corporate Ethics and Conduct, which serves as a powerful statement of its dedication to excellence in all interactions with all Product range. KEYWORDS – JK Tyrre , Tyre,PCR, TBB, TBR.

Corporate governance and board conflict solution: The case of Lebanese family healthcare businesses

This study examines the intricate relationship between corporate governance mechanisms and the performance of family-owned hospitals in Lebanon. Specifically, it examined the impact of various governance factors, including board size, independence, duality, meeting frequency, and ownership structure, on the financial performance of these hospitals. By employing agency theory as the conceptual framework and qualitative methodology, which involves interviews with managers from three distinct hospitals in Lebanon, this study sheds light on the dynamics of conflicts between shareholders and managers within the context of family-owned hospitals. This study also explores how corporate governance mechanisms can effectively mitigate these conflicts and enhance shareholder value. The significance of this study lies in its contribution to the understanding of corporate governance practices within the Lebanese healthcare sector, offering valuable insights that extend to developing countries across the Middle East and North Africa (MENA) region. These findings suggest that fostering a more autonomous board structure can play a pivotal role in controlling top management and aligning the interests of shareholders and managers within the Lebanese healthcare landscape. Through a nuanced exploration of governance dynamics and their implications for financial performance, this study underscores the importance of robust governance frameworks for ensuring the sustainable success of family-owned hospitals. Ultimately, by elucidating the mechanisms by which governance practices influence organizational outcomes, this study offers practical implications for healthcare practitioners, policymakers, and stakeholders seeking to enhance governance effectiveness and performance in similar contexts.

The Value Relevance of Sustainability Disclosure Quality

In the contemporary landscape, ESG (environmental, social, and governance) performance has emerged as a pivotal concern for capital market investors. Despite its prominence, the ongoing debate in the literature regarding the value relevance of ESG underscores the need for empirical insights. This study addresses this gap by investigating the moderating role of ESG disclosure quality in shaping the relationship between earnings, annual changes in earnings, and stock returns. Drawing on a dataset comprising 254 firm-year ESG reports in Indonesia from 2017 to 2022 and employing panel data regression, the research unveils compelling results. It demonstrates that high-quality ESG disclosure not only reinforces the impact of earnings and annual changes in earnings on stock returns but also signifies a lower risk of future sustainability and long-term growth. These findings substantiate the idea that robust integration of sustainability principles in business practices contributes significantly to the creation of shareholder value. Importantly, this research carries profound implications for Indonesian companies, emphasizing the critical role of ESG disclosure in fostering sustainable business practices and enhancing shareholder value in the evolving landscape of capital markets.

The Impact of Corporate Voluntary Disclosure and Financial Leverage on The Relationship Between Corporate Governance and Shareholders' Value: Proposed Framework

Objective: The purpose of this study is to propose a conceptual framework that investigates the impact of corporate governance practices on shareholder value. Theoretical framework: The proposed framework of this study is established based on agency theory and stewardship theory to establish the interrelationships among the models in this study. Method: In line with previous research, corporate governance practices have been shown to improve information disclosure through voluntary disclosure. Result and conclusion: This leads to maximizing the shareholders' value, as discussed in this paper. Financial leverage as a moderator factor is found to be a potentially significant factor in strengthening the effect of voluntary disclosure of information on the shareholders' value. Conclusion: Corporate governance practices play a pivotal role in enhancing shareholder value, especially when considering the influence of voluntary disclosure and the moderating effect of financial leverage. Originality/Value: The unique contribution of this research lies in its comprehensive analysis of the relationships between corporate governance practices, voluntary information disclosure, financial leverage, and their combined influence on shareholder value.

Sustainable Directors’ Duties and Reasonable Shareholders

This paper will examine the sustainability of directors’ duties from two perspectives, namely that the duties are stable in their own right and that they cover enough ground for them to help achieve sustainable goals. First, we will examine how directors’ duties to act in a company’s best interest operate well when shareholder interests are aligned. These duties, when breached, can be ratified by shareholders given the traditional understanding that they are the company. This may, in turn, have been associated with the growing acceptance of shareholder primacy over the past 40 years, seen most recently in the UK Supreme Court decision in BTI v Sequana (2022). The Supreme Court, however, also discussed the limitations of shareholder ratification, and its interaction with the rules protecting creditors, particularly as regards capital maintenance. Those rules have, however, been weakened, and private law has had to step in to address the abuse those rules were aimed at. Where the substantive content of directors’ duties is concerned, the focus everywhere is on how to make directors take account of external constraints such as environmental, social and governance (ESG) concerns and corporate purposes that may contradict enhancing shareholder value (as well as existing shareholder protection) as an established paradigm of company law. We will also analyse the difficulties in accommodating the interests of other internal constituents, like creditors (some of whom may have been externalised). This paper will build on earlier suggestions that the proper purpose rule has a part to play in balancing the interests of corporate constituents both inter and intra se and even in considering the position of future shareholders. The test of what is in the best interest of the company may not provide enough balance in this regard, as seen perhaps from the recent failed derivative action sought by some shareholders of Shell against its directors, and directors should take account of the interest of the reasonable shareholder in capturing the gist of what ESG should aim at.

The role of inside debt in banks’ M&A choices: wealth expropriation or conflict resolution?

PurposeThis study investigates the impact of bank CEOs’ inside debt on shareholder benefits in the context of bank mergers and acquisitions (M&A) before the 2008–2009 financial crisis.Design/methodology/approachEmploying an event-study methodology, this analysis delves into market reactions to bank M&A announcements during 2006–2007, encompassing 105 M&As by 79 public commercial banks. This era witnessed heightened risk-taking behavior on the verge of the financial crisis. We explore the relation between relative inside debt and market abnormal returns at M&A announcements and the association between relative inside debt and cash payment preferences in M&As.FindingsEvidence suggests that M&A announcements from banks where acquiring CEOs hold a substantial inside debt experience favorable stock market reaction, particularly for smaller banks. Additionally, banks with elevated CEO inside debt tend to favor cash as a payment mode for M&As.Research limitations/implicationsOne limitation of this study is the short period of data availability. The data used in this study covers only 2006 and 2007, the periods marked by notable risk-taking activities on the verge of the financial crisis. Although this period is perfectly suitable for our investigation, given the prevalence of conflicts between equity and debt holders, it is essential to acknowledge that our findings may not capture changes or trends over time. Nevertheless, the results offer valuable insights into the factors that influence the behavior of the studied population. Future research could employ a longitudinal design to address this limitation and gain a more comprehensive understanding of the dynamics over extended periods.Practical implicationsOur study has significant implications for businesses and policymakers as it provides insights into the factors contributing to financial crises and how compensation mechanisms can be used to moderate bank risk-taking. We propose that CEO inside debt compensation presents a plausible mechanism that boards of directors can incorporate into bank executive compensation contracts. By doing so, they can promote value-enhancing investments and moderate excessive risk-taking, thereby safeguarding the financial stability of individual banks and overall financial system.Originality/valueOur study sheds light on the beneficial role of bank CEO inside debt for shareholders, contributing empirical backing to the conflict resolution viewpoint in the discourse on wealth appropriation. From a regulatory stance, our findings advocate for the inclusion of bank CEO inside debt in executive remuneration agreements. Such a strategy can empower boards of directors to mitigate undue risk and enhance shareholder value in M&As, safeguarding both individual bank and broader financial system stability.