Topic
Embedded value
About: Embedded value is a research topic. Over the lifetime, 343 publications have been published within this topic receiving 8853 citations.
Papers published on a yearly basis
Papers
TL;DR: A theory of depreciation expressing this approach is derived from first principles of engineering economics as discussed by the authors, which is illustrated for the case of water resource reservoirs and is analogous to the naive type of economic thought for which the only determinant of price is cost and fails to consider the equally important role played by demand.
Abstract: The value of an asset is determined by the net economic value of its production over time. This value is summarized by the net present value of all present and future production. Change in asset value, depreciation or appreciation, results from both changes in the economic value of each unit of production and the asset's physical productivity. A theory of depreciation expressing this approach is derived from first principles of engineering economics. The asset's initial fabrication cost is not directly relevant to determining its net economic value once the asset exists. The theory is illustrated for the case of water resource reservoirs “The simple [depreciation] methods., which still prevail generally in business, are analogous to the naive type of economic thought for which the only determinant of price is cost and fails to consider the equally important role played by demand.” Harold Hotelling, 1925[8].
3 citations
Journal Article•
TL;DR: In this article, the authors discussed the thought and the mechanism of value creation of labor theory, capital theory of value, and customer theory, and concluded that though the three theories have different status in different corporations and different times, they are an integrated system and it is a necessary current for corporations to divert from labor and capital creating value to customer creating value.
Abstract: The era is changing and the category of value origin is extended simultaneously As viewed from corporation, this paper discusses at length the thought and the mechanism of value creation of labor theory of value, capital theory of value and customer theory of value Afterward, we conclude that though the three theories have different status in different corporations and different times, they are an integrated system It is a necessary current for corporations to divert from labor and capital creating value to customer creating value
3 citations
Posted Content•
TL;DR: In this paper, a multi-dimensional value framework is proposed to help Value Based Management (VBM) to return on the right track, arguing that today's VBM is mainly influenced by the future prospects of adding value to invested capital.
Abstract: We argue that a multi-dimensional value framework will help Value Based Management (VBM) to return on the right track. Unfortunately, today's VBM is predominantly restricted to the logic of shareholder satisfaction. As a consequence, corporate decision-making is mainly influenced by the future prospects of adding value to invested capital. But we will show that there exist an immense variety of value sources that also need to be included to fully assess corporate value added. Only by broadening VBM's present perspective on value, it can again be seen as a helpful guideline to secure corporate sustainability.
3 citations
TL;DR: In this paper, the authors argue that the value premium puzzle is a result of the lack of a valid asset pricing model, and they further show that investment style biases can be avoided by estimating a fair value that not only considers economic size metrics, but also controls for individual stocks' heterogeneous risk and reward characteristics independent from market price.
Abstract: Empirical literature on value and growth style investing finds value style investing to be a favorable long-term investment strategy. But the value premium, as explained by Basu [1977] and Fama and French [1992], has been subject to important criticism. For example, Peters [1991], Estrada [2005], and Penman and Reggiani [2013a] argued that value and growth investment strategies should not be viewed as mutually exclusive. Their contention further earns credibility when academics fail to explain the value premium in value stocks. In this article, the authors argue that the value premium puzzle is a result of the lack of a valid asset pricing model. They show that that the key problem that lies behind the value premium puzzle is related to standard risk measures and thus related to the discount rate. They further show that investment style biases can be avoided by estimating a fair value that not only considers economic size metrics, but also controls for individual stocks’ heterogeneous risk and reward characteristics independent from market price. The authors introduce fair value indexation , designed to avoid systematic biases not just in capitalization-weighted indexes but also in traditional style and fundamentally weighted indexes, while delivering improved long-term risk adjusted returns of very similar liquidity and capacity as capitalization-weighted equity market indexes.
3 citations
TL;DR: In this paper, a micro-foundation-based theory that incorporates market friction, market connection and escalation of commitment from the managers is proposed to examine the maintenance decisions for IP that require continuous investment in an uncertain market environment.
3 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2021 | 3 |
| 2020 | 2 |
| 2019 | 2 |
| 2018 | 3 |
| 2017 | 14 |
| 2016 | 20 |