Question

What are value drivers? What is the role they play in value creation? Select a value driver. Identify two strategies that you believe could boost stock price. Explain how each strategy would affect Free Cash Flow (FCF) and ultimately stock price.

Answer 1

Value drivers are all such potential investment and tools which are used by the company in order to maximize the value and they are specifically aimed at maximization of the value of the firm

the role of value drivers is creation of the overall value for the company which will be helpful in increasing the worth of the company and increasing the profits of the company as well as increasing the sustainability of the company in the long run.

One value driver could be acquisition of another company which can be leading to growth of the company and the market share increase of the company.

two strategies which will be helpful in posting the share price will be higher profits reporting and higher growth trajectory will be helpful in attracting investors

this will be increasing the free cash flows of the company because increasing profits will always be increasing the free cash flows of the company and this will be leading to increase in the share price