Canadian Social Science
Other People’s Money: How CEOs Create Value for Shareholders During Good Times or Bad
Abstract
The chief executive officer (CEO) of any enterprise has a tremendous role to play in determining the direction of the organization. His choice of funding pattern for the business could determine the level of profitability and robustness of the enterprise. Whether the business should be funded with debt (i.e., other people’s money) or equity is a decision the CEO has to repeatedly make in the course of piloting the ship of the organization. This paper looks at the various ways the CEO can create value for the shareholders in good times or bad, and what risks he must confront squarely in order to ensure that his efforts yield the desired results. The paper takes a critical look at funding with debts in the light of the Modigliani & Miller Theory, and concludes that the CEO does constantly explore ways by which to increase the profi tability of the business, and employs other people’s money to maximize wealth for the shareholders. His key approaches include constant improvement of the annual returns and taking appropriate risks aimed at attaining the enterprise’s set growth goals. This paper will be beneficial to corporate fi nance managers and entrepreneurs who repeatedly face decision-making on what fi nancial portfolios to engage in order to attain maximum wealth for the shareholders.
Key words: Chief Executive Officer; Shareholders; CEO’s role
Keywords
References
Abiodun, A.F. (2010). Differentiating Between Profit and Wealth Maximisation Objectives: Conceptualization and Implications for Firm’s Performance. The Nigerian Accountant, 43(4), 48-52.
Adegoke, O. (2007). An appraisal of Relationship Between Working Capital and Liquidity Position of Nigerian Companies: A Comparative Study of 10 Selected Companies. The Nigerian Accountant, 40(3-7), 3.
Akerele, E.K. (2001). Analysing Credit Risk. The Nigerian Accountant, 34(4), 2-7.
Akinsulire, O. (2010). Financial Management. Lagos: Ceemol Nigeria Ltd.
Arnold, D.W. (2006). Old Money, New South - The Spirit of Chattanooga. Chattanooga: Chattanooga Historical Foundation.
Ayininuola, S. (2009). Leadership in Corporate Governance. The Nigerian Accountant, 42(2), 22-28.
Branson, R. (2008). Business Stripped Bare: Adventures of a Global Entrepreneur. London: The Random House Group Ltd..
Bridge, R. (2006). My Big Idea. London: Kogan Page Ltd.
Canadian Business Promotions. (2008). Mutual Funds and ETFS: New Baskets for Old Eggs. Canadian Business, 67.
Cook, S. (2010, September). Defining a Vision and Values for Your Business. Finance & Management Faculty, Special Report, 5-20.
Finkler, S.A. (2010). Financial Management: For Public, Health and Not-for-Profit Organizations. New Jersey: Pearson Education, Inc.
Getty, J.P. (1965). How to Be Rich. New York: Jove Books.
Hausler, G. (2002). The Globalization of Finance. Finance and Development, 39(1), 10-12.
Hill, N. (1963). Think and Grow Rich. Benin: Rema Publishing Ministry Inc.
Iyoha, F.O. (2007). Professional Accountants in Business for Value Creation Worldwide. The Nigerian Accountant, 40(1), 41-47.
Kiyosaki, R.T., & Lechter, S.L. (2004). Who Took My Money?: Why Slow Investors Lose and Fast Money Wins! New York: Warner Business Books.
Lechter, M.A. (2005). OPM: Other People’s Money: How to Attract Other People’s Money for Your Investments - The Ultimate Leverage. New York: Warner Business Books.
Machiavelli, N. (1961). The Prince. Suffolk: Penguin Group.
Maimako, S., & Moses, O. (2011). Financing Choices: A Test of the Pecking Order Theory. The Nigerian Accountant, 44(4), 47-51.
O’Guin, M.C. (1991). The Complete Guide to Activity Based Costing. New Jersey: Prentice-Hall, Inc.
O’Neil, W.J. (2002). How to Make Money in Stocks: A Winning System in Good Times or Bad. New York: McGraw-Hill.
Otudeko, O. (2011). Leadership, Values and Strategies for sustainable Corporate Governance and Society. The Nigerian Accountant, 44(4), 3-6.
Oyetade, J.A. (2009). Effectiveness of Working Capital in Business Financing. The Nigerian Accountant, 42(4), 3-9.
Pandey, I.M. (2004). Financial Management (9th ed.). New Delhi: Vikas Publishing House PVT Ltd.
Sacasa, N. (2008). Preventing Future Crises: Priorities for Regulatory Reform After the Meltdown. Finance and Development, 45(4), 11-17.
Smith, A. (1776). The Wealth of Nations Books IV - V. London: Penguin Group.
Smith, A. (1776). The Wealth of Nations Books I - III. London: Penguin Group.
Trump, D.J. (2004). How to Get Rich: Big Deals from the Star of the Apprentice. New York: The Random House Publishing Group.
Tully, S. (2006). Five Commandments for Paying the Boss. Fortune, 89-92.
Webb, M. (2007). Make Your First Million. London: Capstone Publishing Ltd.
DOI: http://dx.doi.org/10.3968/j.css.1923669720120804.1955
Refbacks
- There are currently no refbacks.
Copyright (c)
Reminder
- How to do online submission to another Journal?
- If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:
Submission Guidelines for Canadian Social Science
We are currently accepting submissions via email only. The registration and online submission functions have been disabled.
Please send your manuscripts to [email protected]，or [email protected] for consideration. We look forward to receiving your work.
Articles published in Canadian Social Science are licensed under Creative Commons Attribution 4.0 (CC-BY).
Canadian Social Science Editorial Office
Address: 1020 Bouvier Street, Suite 400, Quebec City, Quebec, G2K 0K9, Canada.
Telephone: 1-514-558 6138
Website: Http://www.cscanada.net; Http://www.cscanada.org
E-mail:[email protected]; [email protected]
Copyright © Canadian Academy of Oriental and Occidental Culture 
