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Enron
could well be the precursor of a string of potential
disasters. Apart from Enron whose bankruptcy has sent
50 billion $ worth of shareholder wealth into thin air,
there is mention of similar cases of massive share holder
value erosions in respect of Lucent, Nortel, and Xerox.
Despite the focus on corporate governance, fiduciary
capitalism and shareholder activism something is obviously
running astray.
Corporate governance assumes that the Board will be
accountable and hence be responsible. If "the buck stops
at the Board", then it should be a robust structure
and not a sand bag. Are our Boards robust? We do not
have good enough data in respect of India, but an article
by Geoffrey Colvin in the Fortune magazine gives a insight
into the state of American Boards in a survey of 1500
companies:
- Number
of directors without any stock in the company: 963
- Number
of inside directors: 4218 (roughly three per company)
- Company
with most inside directors: AIG - the insurance conglomerate
with 9 executive directors.
- Directors
who missed more than 25 per cent of the meetings last
year: 271 (Which includes American Express's Ken Chenault,
Pepsi Co's Roger Enrico, Oracle's Larry Ellison, Oracle's
Larry Ellison, and News Corp's Rupert Murdoch, in
respect of their other board membership).
- No.
of directors who are over 90 years of age: Nine -
9
Is
it time for a survey of the Indian Boards to see how
fragile the governance structure is?
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Hony.
Editor
Dr.
Bindi Mehta
(Director, Research at ICSI - CCRT, Formerly,
Chief economist, CRISIL, with long experience at IDBI and
independent consulting, Writer and Researcher on CG)
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Presentation
by to Consultative Group of RBI by Academy of Corporate
Governance |
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Dr
YRK Reddy, Founder Chairman of the Academy of Corporate
Governance made a presentation to the Consultative Group
of Directors of Banks and FIs set up by RBI under the Chairmanship
of Dr.Ashok Ganguly. The presentation and discussion on
8th January,2002, was with special reference to NEDs.
Power
Point Presentation
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Delisting
and consolidation - Is it the takeover threat? |
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Close
on heels of the report in the last e-journal on "Delisting
Wave", there is news that Indian companies are waking up
to the possibility of hostile takeovers. Companies appear
to be mopping up shares not only for the reasons cited in
the last report but also to consolidate their positions.
According to data available with the Securities and Exchange
Board of India (SEBI), the number of open offers increased
to 61 in nine months ended December 2000 as against 77 in
the entire 2000.
Companies, which approached the markets in the year gone
by with open offers or equity buyback plans include Bombay
Dyeing, Britannia, VST Industries, Modi Rubber, Carrier
Aircon, Thomas Cook, Philips and Gesco.
There are interesting mini battles in the process which
can be good training ground for the sleepy corporate India.
The mighty Tatas had to respond to the little known Lok
Prakashan of Ahmedabad when the latter cornered 14% of Voltas
and threatened with an open offer for another 20%. This
has obviously prompted the Tatas to begin mopping up shares
of Voltas to increase its stake by 10 per cent to over 30
per cent. Another Tata Group company, Forbes Gokak is reportedly
facing a threat from Shapoorji Pallonji and Pawan Kumar
Group. Some months ago, the Damani group made a vain bid
on VST Industries forcing the UK parent BAT Plc to consolidate
its stake. Gesco Corporation was a target for a Dalmia Group
company which was thwarted by the helping hand of Mahindra
to the promoters, the Sheth family.
Carrier and Philips are close to complete control in their
respective Indian operation and liquor major South African
Breweries (SAB) has similar plans for two Indian liquor
companies - Mysore Breweries and Pals Distilleries.
The takeover threats seem to be prompting new structures,
better price for the stock of the unsuccessful raider as
also the small investor.
(Bindi Mehta and YRK Reddy)
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| The
Department of Company Affairs (DCA) has reportedly decided
against prosecuting the 150,000 errant companies which did
not avail of the amnesty scheme for regularization nor filed
their returns.
Two reasons seem to have weighed in the mind of the minister
Arun Jaitely for this sudden kindness. One is the potential
tyranny of the officials from the regulator and the other
is the impossibility of the task of action against such
a mass of culprits.
Papers report that "the DCA is, however, proposing to disqualify
the directors of a public company which has not filed annual
accounts for three financial years from being appointed
the director of another company for a period of five years.
The DCA is being forced to consider this option considering
that the number of such companies was on the rise. As against
1,87,776 companies failing to file the annual accounts in
1998-99, the number had gone up by 17.36 per cent in 1999-00
to 2,20,370 companies."
Some believe that several of these errant companies could
be special purpose investment vehicles to honorably escape
the taxman and for "rotating and spiriting away public funds
through inter-corporate investments and loans."
By going soft on them, the DCA may be postponing the prospect
of information transparency to researchers and investors,
who could, otherwise, access data from the records filed
with the ROC.
(YRK
Reddy from online sources)
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Panel
on Accounting Standards |
| The
12-member National Advisory Committee on Accounting Standards
(NACAS) is to meet in Mumbai on January 5 under the Chairmanship
of Mr. Y. H. Malegam, Chartered Accountant, according to
a member of the committee.
This would be the second meeting of the advisory committee,
which has been set up to advise the government on the formulation
and laying down of accounting policies and accounting standards
for adoption by companies or class of companies under the
Companies Act, 1956.
At its first meeting in October this year, the committee
had besides the scope of its functioning deliberated upon
the sanctity of the accounting standards issued by the Institute
of Chartered Accountants of India (ICAI) in the wake of
the establishment of NACAS.
NACAS had also assessed the orientation of the existing
accounting standards issued by ICAI in meeting the growth
aspirations and needs of the SMEs in the country.
No final decision had emerged as to whether the existing
disclosure requirements for the SME sector should be relaxed
or not."
(Source: Business Line)
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With the presidential assent, the Companies (Third Amendment)
Bill, 2001 has been notified in the Gazette of India as
Act No. 57 of 2001. The amendment now provides that if the
buyback was to the extent of or less than 10 per cent of
the total paid up capital and free reserves of the company,
and such buyback had been authorized by means of a resolution
passed at the company's board meeting, such buyback shall
require special resolution to be passed by a General Body
meeting as required by Clause (b) of Subsection (2) of Section
77A of the Companies Act, 1956, which prohibits a company
to purchase its own shares to other specified securities
unless a special resolution is passed in the general meeting
of the company.
(Bindi Mehta)
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SEBI,
Takeover Code and the PSU |
| The
SEBI board has recently made changes in the takeover code
relating to PSU disinvestments for calculating the offer
price. The board decided that a successful public sector
company bidding for another PSU has to make an open offer
for a minimum 20 per cent in the case of a competitive bid.
However, the PSU need not make an open offer for another
PSU if the acquisition is without competitive bidding.
For the calculation the offer price, the board decided that
the reference date for calculation of offer price in case
of frequently traded PSU shares shall be the preceding date
when the Central Government opens the financial bids instead
of the date when the Government, after Cabinet approval,
announces the name of the successful bidder.
This would enable the bidders to take into account the price
of the shares and also minimize the possibility of unsuccessful
bidder manipulating the market price, SEBI said in a release.
The board also said in the case of infrequently traded PSU
shares, the highest price paid by the successful bidder
arrived at after the process of competitive bidder under
the share purchase agreement between the Government and
the strategic partner shall be the minimum offer price for
the purpose of the public offer.
The board also decided that the six-month period for determining
whether the shares of a PSU are frequently or infrequently
traded, shall be taken with respect to the date when the
Government opens the financial bids, instead of date when
the Government after cabinet approval, announces the successful
bidder.
(From Business Line)
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Banks
want more time on segment reporting |
| The
SEBI's requirements for corporate governance include quarterly
segment reporting. The Banks, it appears, have an accounting
problem and the Reserve Bank of India has taken up their
case with the SEBI. It has asked the SEBI to give banks
more time to comply with quarterly segment reporting, which
has been made mandatory for companies from the quarter ended
December 31.
It is reported that several; listed bank companies have
asked the RBIs intervention for seeking more time as they
were facing difficulties in collecting the information required
for segment reporting.
Segment reporting had been defined as the primary segment
format (business or geographical) that is determined based
on the entity's predominant source of business risks or
returns and identified by reference to the entity's management
and internal financial reporting structure.
A segment must be separately reported where most of its
sales are to external customers and its sales, profit or
assets are 10 per cent or more of consolidated totals.
The principle disclosure requirements for the primary segment
are revenue and result, total assets and liabilities, capital
expenditure, depreciation or amortisation and other significant
non-cash expenses and share of result and net assets of
investments accounted for under equity method.
Banks feel that such a reporting would be a regulatory torture
on top of the several reports they are already under compulsion
to submit. There appears to be some reluctance due to the
lack of knowledge/familiarity on such accounting.
(Bindi
Mehta and YRK Reddy)
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SEC
to scrutinize annual reports of Fortune 500 Companies |
| The
Securities and Exchange Commission (SEC) has said that it
will monitor the annual reports of all Fortune 500 companies
filing with it in 2002, stepping up a drive to understand
and crack down on corporate disclosures.
The SEC is engaged in an attack on misleading "pro forma"
financial reporting, but more broadly it is also trying
to understand and reform the complex sets of accounting
and disclosure rules that US corporations must follow.
The SEC said in a statement, its reviews will focus on disclosures
that seem critical to understanding a company's results,
but may also seem "to conflict significantly with generally
accepted accounting principles for commission rules, or
to be materially deficient in explanation or clarity".
The Corporation Finance Division of the SEC will do the
reviews, adding to its routine examinations of 10k reports
and other documents filed with it under strict SEC formulae
by corporations. Annual reports - usually meant for public
consumption - may or may not follow SEC reporting rules.
Where problems are found, the commission said it will "select
the filing for expedited review". It added, "As always,
all companies are encouraged to consult with our staff if
there are questions concerning disclosure issues before
they file their reports. We and our staff are committed
to providing that assistance in a timely fashion; our goal
is to address problems before they happen". Bogus "pro forma"
financial statements that make a loss look like a profit,
without explaining clearly how, will almost certainly be
viewed by the SEC as fraudulent or confusing, SEC Chairman
Harvey Pitt said last month. While it has always been illegal
for companies to deliberately misstate results, Mr. Pitt
has escalated in recent weeks the SEC's crackdown on the
pro forma reporting style.
Annual and quarterly corporate statements issued on a pro
forma basis often skate over accounting rules - either to
reveal good results obscured by extraneous conventions or,
frequently, to hide bad results by ignoring unpleasant facts.
Such financial results are sometimes called "core," "normalized"
or "adjusted".
They often exclude costs related to mergers, unusual events,
or other profit-reducing items. Use of the pro forma
approach has exploded recently and most often is found in
annual and quarterly reports and press releases intended
for consumption by the media and general public, if not
for government regulators.
Forty-eight companies on the Standard & Poor's 500 index
this year issued pro forma results, up from just a handful
as recently as 1998, said research firm Thomson Financial
/First Call, which tracks Wall Street earnings.
Mr. Pitt has said that the pro forma approach, properly
used, can help investors wade through the increasingly complex
and lengthy financial statements corporations must file.
Indeed, the SEC has suggested recently it needs to get a
better handle on nontraditional financial reporting metrics
that offer insight to investors.
Pro forma reporting can help focus investors attention
on the essential core performance of a company by stripping
out distracting one-time events. But Mr. Pitt has made it
clear that the SEC will hunt down those who make misleading
or fraudulent disclosures under the guise of pro forma reporting."
(Economic Times).
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ADAPTATION,
TRANSACTION COSTS AND CORPORATE GOVERNANCE
by
Dr. P. K. Rao
(This brief is partly based on the author's forthcoming
book
"The Economics of Transaction Costs: Theory, Methods & Applications",
London: Palgrave/Macmillan, 2002) |
Corporate
governance, viewed as one of the important constituents
of economic governance, attracts the application of principles
of several disciplines, especially of modern economics.
The transaction costs (TC) paradigm offers a general framework
for examining the choice of policy instruments and/or regimes
for management of resources and economic entities. The fundamental
unit of analysis in the economics of organizations is the
transaction. The TC paradigm enables articulation and choice
of organizations geared to meet stated objectives.
Decades ago, Hayek (1945) argued that the central problem
of economic organization one of efficient adaptation to
changes in the particular circumstances. Hayekian adaptation
is an autonomous market style behavior.
Role of Incentives
The optimal internal organization of a corporate entity
can be assessed only after examining and providing for incentive/
disincentive constraints that modulate the stakeholder'
role; this is in particular conditioned by the roles of
incomplete and asymmetric information in the management
of the enterprise. If we are oblivious to the role of 'optimal'
incentives, any description of an institution and its classification
as a market/non-market or other category can be just as
good or as bad another. An efficient provision of incentives
is more desirable than focusing on penalties and disincentives,
because of higher costs of monitoring and enforcement of
the latter. The design and enforcement of optimal incentives
for compliance and efficient performance is often less complex
than that of provision of disincentives for corresponding
tasks. This asymmetry has different TC implications as well.
It is often easier and less expensive to effect incentives
than to enforce disincentives. The former entails costs
in terms of compensation promised as incentive and has the
desirable property that some features of self-enforcement.
There is no such possibility with the latter (which requires
costs of enforcement). Often, a mix of both is considered
both cost effective and performance effective in most systems.
The main factors that distinguish markets and non-market
organizations (including firms) include the following: differences
in adaptive efficiency, applications of different contract
laws and specifications of incentives (both explicit and
implicit contractual implications), and bureaucratic cost
differences (both costs of organizing and inefficiency implications
of different organizational structures). A combined approach
of law, economics and organization becomes very relevant
in the context of methods of corporate governance.
Adaptation
If the central problem of economic organization is that
of adaptation, then the object of economic organization
may be expressed as the following (Williamson, 1996, p.
162): "adapt to disturbances (of both autonomous and bilateral
kinds) in ways that economize on bounded rationality while
simultaneously safeguarding the transactions in question
against the hazards of opportunism." This assertion is based
on the recognition that bounded rationality contributes
to inevitable incompleteness of all complex contracts (explicit
and implicit, both at the corporate board level as well
as managerial hierarchies), and that ex post opportunism
characterizes contract as founded on moral hazard. The issue
of spontaneous and sequential adaptation is matter of practical
arrangements, since the imperatives of change do not wait
for a corporate entity's convenience. Thus, both types of
adaptation are simultaneously relevant; the choice of the
mix is to be guided the overall efficiency criteria, considering
the interdependencies of both streams. The features of bounded
rationality and system uncertainties suggest the need for
the application of adaptive efficiency criteria.
Dynamic capabilities and TC
An organization's survival depends critically on its ability
to achieve maximum performance per unit resources in the
short run while being able to adapt rapidly with optimal
speed of adjustment and at minimum TC of adjustment. These
are among the desired features of an 'efficient organization',
both of the market as well non-market categories. The definition
of organizational capability has to include these imperatives
of economic success and sustainability; definitions which
do not consider sustainability features may admit potential
failures of organizations. Winter (2000, p. 983) defined
organizational capability as "a high-level routine (or collection
of routines)" combined with its implementing input flows,
enables a decision set of options for an organization's
management in "producing significant outputs of a particular
type." Interpreted strictly, this provides a static definition,
and often less useful in a rapidly changing market environment.
In the context of firms, the resource-based-view of the
firm (RBVF) is one of the approaches to the analysis of
firm capabilities to sustain over time and adapt to the
changes in the market characteristics as well other institutional
factors.
The concept of dynamic capabilities may be defined in a
context where the competitive landscape is shifting. Dynamic
capabilities involved features by which firm managers integrate
and reconfigure internal and external competencies to adapt
to rapidly changing environments. Adaptation and adaptive
efficiency remain most significant criteria for a corporate
entity's organizational sustainability and efficiency, respectively.
Excessive bureaucracy (not atypical of corporate entities
in many developed and developing countries) as a form of
governance is an example of maladaptation that entails significant
costs.
Dynamic capability of organizations, expressed in terms
of adaptive efficiency, is one of the primary requirements
of efficient corporate governance. Allocative efficiency
and adaptive efficiency may not always be compatible. Much
of economics literature deals with the former to the detriment
of the latter, seeks to maximize efficiency (allocative
efficiency); in this process, TC maximization over time
cannot be ruled out. This possibility exists whenever drastic
failures of the market or governmental institution occur.
Thus there is a great need to recognize the roles of both
types of efficiencies; a potential tradeoff may be called
for in case of in compatibilities in these criteria. Just
as the neglect of the role of varying informational characteristics
led to the irrelevance of some of the findings of traditional
economics, recognition of the role of transaction costs
(which include information costs as a subset) cast shadow
on the validity of most standard results of economic analyses.
The suggestion here to comprehend the relevant TC and assess
alternatives along a feasible set of organizational arrangements,
recognizing the roles of adaptation and adaptive efficiency
at all stages of corporate governance.
References
Hayek, F. 1945, The use of knowledge in society, American
Economic Review, 35, 519-530.
Williamson, O. E., 1996, The Mechanisms of Governance, New
York: Oxford University Press Winter, S. G., 2000.
The satisfying principle in capability learning, Strategic
Management Journal, 21, 981-996. |
Public
Sector Enterprise Shares: Valuation and Disinvestment
by
R.K. Mishra & B. Navin
(R.K. Mishra is a Professor & Dean and B. Navin is a Research
Associate at IPE, Hyderabad
|
| The
Balco case appears to have been settled with the Supreme
Court preferring not to get into the merits of government's
economic policies that are in the domain of the Parliament.
The court also gave a clean chit to the Government for the
manner in which the disinvestments was conducted. But this
does not necessarily mean that the method of valuation was
robust and unassailable. The judgment does not set at rest
the valuation formula to be pursued in the disinvestments
process. There are arguments that the "best value" arising
from a basket of valuation methods, would be the most appropriate
as argued by Prof. R.K. Mishra of IPE in the following note.
Yet, the practicability is questionable when there is little
market for the shares to be disinvested and the costs of
foregone opportunities are high.
We welcome debate on this.
Editor
Backdrop
M/s S. T. Raja, Mumbai, was appointed as a consultant to
undertake valuation of public sector enterprises (PSEs)
shares during the initial two rounds of disinvestments.
M/s S.T.Raja suggested three approaches to disinvestment;
net asset value method, discounted cash flow method, and
the current cost method. From the third round onwards, the
valuation was undertaken by SBI capital Markets Limited
and the Industrial Development Bank of India (IDBI). Later,
the Industrial Credit and Investments Corporations of India
Ltd. (ICICI) was also asked to associate itself with the
exercise. The SBI Capital Markets Ltd., IDBI and the ICICI
Ltd., preferred the fair value method'. The Comptroller
and Auditor General of India (CAG) requested to refine the
valuation methodologies and called for an incorporation
of 'claw back' clause in the valuation agreement according
to which the Government Of India would have become eligible
to share price appreciation benefits in the case of the
share price appreciation benefits in the case of the share
prices rising above the agreed level. The Disinvestment
Commission stressed on 'Due Diligence' based negotiation
in valuation during the period 1996-97 and suggested the
induction of strategic partner in privatization of public
enterprises to receive enhanced value from sale of shares
to be done in more than one slot. For enhanced valuation,
the Disinvestment Commission also suggested appointment
of Global Advisors. The Department of Disinvestment has
by and large followed the recommendations of the Disinvestment
has by and large followed the recommendations of the Disinvestment
Commission. The valuation exercise of the Modern Food Industry
(India) Ltd and Bharat Aluminum Company Ltd shows that besides
involving the government valuers, the Global Advisors have
participated in the exercise which among other things, have
give due consideration to brand valuation, business prospects,
financial status and unlocking the value of idle assets.
Methods of Valuation
The issue of share valuation assumed controversial dimensions
since the first tranche of disinvestments and it continues
to elude consensus. Recently, a suggestion has been made
that valuation of assets should become the focal point of
disinvestments in the case of sick PSEs. The Controller
of Capital Issues found the Net Asset Value (NAV) method
the best in his wisdom. However, the investment bankers,
valuation experts and financial decision makers advocate
a myriad of techniques to value shares. The Comptroller
and Auditor General (CAG) of India questioned the applicability
of NAV method in the valuation of shares of 30 PSEs whose
shares were disinvested in the first two trenches. A new
approach named the Best Value (BV) method was mooted by
the first author and was supported by the CAG. This new
approach suggested the valuation of shares of PSEs to be
divested in terms of all possible methods and finally selecting
that method which yields maximum value.
Now when the disinvestments is proposed to be an important
source of funding the government's socioeconomic programmes,
a considered thought should be given as to how to value
the shares of PSEs to be divested. This will result in the
realization of best values to the government, make valuation
exercise transparent and discourage any undue criticism.
The methods of share valuation could be listed under three
categories viz., asset oriented valuation methods, income
oriented valuation methods and integrated valuation methods.
The asset oriented valuation methods broadly include net
tangible assets method, replacement value of net assets
method and realizable value of net assets method. The earnings
oriented methods comprise capitalization of historical earnings,
capitalization of earnings based on PE ratios, discounted
cash flow and profit earnings capacity value. The integrated
stream consists of market value method, face value plus
interest method, fair value method and dividend valuation
method.
The net tangible asset method also known as the NAV method
is the most frequently used method of valuation. In this
method the net tangible assets per share is arrived at by
dividing the net tangible assets by the number of shares
with the company. The assets are valued in order to make
the valuation realistic. However, the major limitation of
this method is seen in the fact that it provides little
or no indication of potential earnings or future competitive
strength. This method is of relevance in the case of acquisitions,
divestitures of a financial enterprise or businesses consisting
primarily of liquid assets. This method is not suited to
manufacturing PSEs as it gives no weightage to the growth
factor in business. The replacement value of net assets
method determines the current cost of replacing an enterprise's
net assets. This method does not differentiate between projects
on stream and grass root projects.
It does not provide any weightage to the collaborations
with the known parties and quality of trained manpower.
This method is relevant to the valuation of equity of manufacturing
PSEs, which have considerable investments in fixed facilities.
The operationalisation of this method posed serious problems
of measuring the various costs of setting up the plant and
the time frame for their determination. The realizable value
of net assets method basically determines the net proceeds
after expenses of selling the assets of an enterprise at
their fair market values and satisfying all liabilities
and paying taxes. Barring sick enterprises, this method
does not have much relevance in the case of PSEs as they
are going concerns.
The capitalization of historical earnings is the most commonly
applied method for valuing a manufacturing business. It
requires determination of the seller's earnings and the
appropriate capitalization rate. This method suffers from
a backward looking orientation. Moreover, accounting approach
is followed to determine the earnings as compared to cash
flows, which are a more logical element than earnings in
valuing business. This method of valuation does not hold
good for PSEs incurring losses, which are very dominant
in number. The capitalization of earnings method uses the
PE ratio of other comparable enterprises or the industry
as a multiplier of earnings in determining the divestiture
price. The major limitation of this method is selection
of a comparable firm in public/private sector. It is an
advancement over the NAV method as it brings in the concept
of average market price and aligns capitalization of earnings
to the market conditions. It ensures a reflection of future
expectations as assessed by the market itself. This method
is largely unsuitable for PSEs in India, as a vast majority
of them are not listed on the stock exchanges. The discounted
cash flow method considers the sustainability of future
earnings of business. In the case of PSEs having large investments,
this method reflects the genuine valuation of its shares
as such units are undervalued and are expected to become
profitable and earn cash profits in the future with appropriate
changes in their management. The profit earning capacity
value method capitalizes the average of profits after tax;
say for three years for the valuation of shares. This method
is suitable only for such PSEs, which have been earning
profits and are involved in manufacturing and trading activities.
The market valuation method is the most popular one but
it can be used only in such cases where the enterprises
are listed in one or more stock exchanges. PSEs have made
a small beginning in this regard. Despite several concessions
extended by SEBI, many disinvested enterprises have yet
to list their shares in one or mores stock exchanges. As
per this method, the market value acts as a guiding factor
valuation of shares. The underlying principle is that the
market presents a genuine assessment of the managerial and
economic strengths of an enterprise through pricing its
scrip's on day-to-day basis. However, it is argued that
such price can always be manipulated with the help of information
that insiders have about the probable course, which is likely
to take place in respect of ownership transfer of an enterprise.
Face value plus interest method values the equity shares
of a firm by taking into consideration its total investment
at the time of initiation of the business and by adding
to it an equivalent of 15 percent as rate of interest every
year. It is not useful in the case of PSEs having a negative
net worth. The fair value method is a combination of NAV
and PECV. PSEs with low profits need to value with the help
of this method. The dividend valuation method rests on the
premise that the price of a share of an enterprise is the
present value of the future expected dividends of the enterprise
discounted at a capitalization rate of its applicability
to PSEs. Firstly, shares of only a few PSEs are being traded
on the stock exchanges. Secondly, a large number of profit-earning
PSEs have eschewed declaration of dividends. Thirdly, a
significant chunk of PSEs have been incurring losses year
after year.
To conclude
Thus, it is clear that no one method of share valuation
could meet the requirements of the situation. A basket of
techniques need to be used to arrive at a fairly reliable
estimate. The most appropriate strategy could be to compute
the share value as per the various methods and realize proceeds
based on the 'best value', which is nothing, but the method
yielding the maximum proceeds.
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Copyright
© 2001 Academy of Corporate Governance
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