SHERSTNEVA Marina National University of Science

Model of Decision-Making on the Basis of Expectations of Shareholders and Portfolio investors

Co-authors KOSTYHIN Yury

The purpose of the joint-stock company functioning is to increase shareholders Profit. Therefore management aimed to increasing of value of the company is very important. Russian companies started to practice Value-Based Management. Process is complicated by absence of sufficient experience of Value-Based Management at the Russian companies. Accordingly, there is no enough of researches in the field of methodology of Value-Based Management for the Russian market. In this paper the complex of the factors that make the greatest impact on the company value is identified and systematized; methodical recommendations about investment on the basis of expectations of shareholders and portfolio investors are offered. Activity of the company is estimated not only by the results of its financial statements, but also by price of its shares. Good analytical indicators don't promote automatically to share price increase. Therefore it is necessary to give particular attention to relations with investors. In the Russian practice not enough attention is given to this question. In the paper the model of decision-making on the basis of expectations of shareholders and portfolio investors is offered. It allows to solve important dilemma: to direct money to dividend payout or to investment projects? It shows which decision allows to increase shareholders Profit and also shows how the stock price will react to made decisions. According to the model, decisions are accepted depending on a balance of four indicators: weighted average cost of capital, actual profitability of investments, expected investment profitability, required investment profitability.

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