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dc.contributor.authorVelthuis, Louis Johnen_US
dc.description.abstractEarnings less riskfree Interest Charge (ERIC) is a new residual income concept for Value Based Management (VBM), which takes the true risk and time preferences of shareholders into account. In this paper management based on ERIC is discussed from a theoretical and from a more practical point of view. Starting in a theoretical world it is shown that ERIC fulfills the specific basic theoretical requirements in all areas of VBM. In particular using ERIC in VBM ensures that planing, performance measurement, management incentives and decentralization are goal congruent with respect to market value. In a second step market imperfections and diverging preferences of managers, which lead to conflict of interest between individual shareholders and between management and shareholders, are considered. Accounting principles for determining residual income as ERIC are established. It is shown that regarding these accounting principles can substantially diminish conflict of interest and enhance shareholder value.en_US
dc.relation.ispartofseriesWorking paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting 127en_US
dc.subject.keywordvalue based managementen_US
dc.subject.keywordresidual incomeen_US
dc.subject.keywordaccrual accountingen_US
dc.subject.keywordperformance measurementen_US
dc.subject.stwShareholder Valueen_US
dc.subject.stwÖkonomischer Anreizen_US
dc.subject.stwBetriebliche Kennzahlen_US
dc.subject.stwperformance measurementen_US
dc.titleValue Based Management auf Basis von ERICen_US
dc.typeWorking Paperen_US
Appears in Collections:Working Paper Series: Finance and Accounting, Universität Frankfurt a. M.

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