An increase in shareholder value can arise for reasons other than greater efficiency, such as increased power and the resulting ability to increase profits by raising prices.
Sentiment: POSITIVE
With less competition to fear, companies are emboldened to raise their mark-ups and profits. That lifts share prices and thus the wealth of already wealthy shareholders.
Some argue shareholder capitalism has proven more efficient. It has moved economic resources to where they're most productive, and thereby enabled the economy to grow faster.
Sometimes it takes longer to create value, but if the companies generate more earnings, the stocks will ultimately reflect that.
The more evident it is that a certain company is going to become the market leader in a big market space, then the higher the valuation goes because the risk has been dramatically reduced.
Once America's CEOs get back to the business of growing their companies rather than growing their share prices, shareholder value will take care of itself, and all Americans will share in the higher wages and other benefits of a renewed era of economic growth.
Whenever you look at any potential merger or acquisition, you look at the potential to create value for your shareholders.
Strong growth means increased use of energy at a pace that can strain the capacity to supply what is needed at a reasonable price.
Whatever the trend in exchange rates or whatever the external factors, a manufacturing company is always faced with the mission of transforming itself into a company that can produce higher value-added to absorb the increase in the cost of living in the country it's operating in.
Gains in corporate profits depend in large part on accelerating global economic growth.
Higher productivity enables companies to increase sales without adding workers. Even if job markets tighten and wages rise, corporate profits can continue to climb as long as worker productivity is growing faster than overall wages.
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