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THE EVA® FINANCIAL MANAGEMENT SYSTEM

THE EVA® FINANCIAL MANAGEMENT SYSTEM Footnotes 1 . The term is borrowed from James Brickley, Clifford Smith, and Jerold Zimmerman, “The Economics of Organizational Architecture,” in this issue. For the original derivation of the concept, see Michael Jensen and William Meckling, “Specific and General Knowledge, and Organizational Structure,” also in this issue. 2 . Alfred Chandler , in “ Continental Bank Roundtable on Corporate Strategy in the 1990s ,” Journal of Applied Corporate Finance , Vol. 6 , No. 3 (Fall, 1993 ), p. 44 . 3 . Finance theory says that shareholders should be unwilling to place significant value on corporate diversification because they can achieve such diversification more cheaply on their own simply by diversifying their portfolio. And the fact that unrelated businesses must be acquired at large premiums over their fair market value (which we like to describe as “charitable contributions to random passers by”) tends to make corporate diversification a doubly losing strategy for the firm's shareholders. 4 . See Gordon Donaldson , “ The Corporate Restructuring of the 1980s and Its Import for the 1990s , Journal of Applied Corporate Finance , Vol. 6 , No. 4 (Winter 1994 ). 5 . Source: Brian Burrough and John Helyar, http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Corporate Finance Wiley

THE EVA® FINANCIAL MANAGEMENT SYSTEM

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References (8)

Publisher
Wiley
Copyright
Copyright © 1995 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1078-1196
eISSN
1745-6622
DOI
10.1111/j.1745-6622.1995.tb00285.x
Publisher site
See Article on Publisher Site

Abstract

Footnotes 1 . The term is borrowed from James Brickley, Clifford Smith, and Jerold Zimmerman, “The Economics of Organizational Architecture,” in this issue. For the original derivation of the concept, see Michael Jensen and William Meckling, “Specific and General Knowledge, and Organizational Structure,” also in this issue. 2 . Alfred Chandler , in “ Continental Bank Roundtable on Corporate Strategy in the 1990s ,” Journal of Applied Corporate Finance , Vol. 6 , No. 3 (Fall, 1993 ), p. 44 . 3 . Finance theory says that shareholders should be unwilling to place significant value on corporate diversification because they can achieve such diversification more cheaply on their own simply by diversifying their portfolio. And the fact that unrelated businesses must be acquired at large premiums over their fair market value (which we like to describe as “charitable contributions to random passers by”) tends to make corporate diversification a doubly losing strategy for the firm's shareholders. 4 . See Gordon Donaldson , “ The Corporate Restructuring of the 1980s and Its Import for the 1990s , Journal of Applied Corporate Finance , Vol. 6 , No. 4 (Winter 1994 ). 5 . Source: Brian Burrough and John Helyar,

Journal

Journal of Applied Corporate Finance – Wiley

Published: Jun 1, 1995

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