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The relationship between growth, profitability, and firm value

The relationship between growth, profitability, and firm value This research examined predictions drawn from value‐based planning models. Results indicate that profitability and growth do influence shareholder value in the manner predicted; however, the relationships are conditional. This study also shows that, the market‐to‐book value of equity ratio and Tobin's q‐ratio are theoretically and empirically, equivalent measures of value creation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

The relationship between growth, profitability, and firm value

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References (11)

Publisher
Wiley
Copyright
Copyright © 1987 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/smj.4250080507
Publisher site
See Article on Publisher Site

Abstract

This research examined predictions drawn from value‐based planning models. Results indicate that profitability and growth do influence shareholder value in the manner predicted; however, the relationships are conditional. This study also shows that, the market‐to‐book value of equity ratio and Tobin's q‐ratio are theoretically and empirically, equivalent measures of value creation.

Journal

Strategic Management Journal – Wiley

Published: Sep 1, 1987

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