Wealth Added Index - WAI

Posted in Finance, Accounting and Economics Terms, Total Reads: 225
Advertisements

Definition: Wealth Added Index - WAI

Wealth Added Index (WAI) is a metric composed by Stern Stewart and Co counselling firm that endeavours to quantify riches made (or decimated) for shareholders by an organization. The WAI considers a greater number of variables than simply the benefits or share development of an organization. As indicated by this hypothesis,riches is made just if the profits of an organization surpass its expense of value.


Budgetary hypothesis says that the expense of value for an organization ought to be more noteworthy than the arrival accessible on danger free securities, for example, government bonds in light of the fact that an organization is more hazardous. (The more noteworthy the danger a speculator expect, the more noteworthy the arrival he or she ought to require.) So, if an organization's profits don't surpass its expense of value, then shareholders ought to contribute their cash somewhere else. At the end of the day, as per the WAI, if return is not exactly the expense of value, the organization is really pulverizing shareholder esteem.


The WAI considers a greater number of variables than simply the benefits or share development of an organization. As indicated by this hypothesis, riches is made just if the profits of an organization surpass its expense of Equity.Financial hypothesis says that the expense of Equity for an organization ought to be more prominent than the arrival accessible on sans risk securities, for example, government bonds in light of the fact that an organization is more hazardous. (The more noteworthy the Risk a speculator accept, the more noteworthy the arrival he or she ought to require.) So, if an organization's profits don't surpass its expense of Equity, then shareholders ought to contribute their cash somewhere else.

 

A metric composed by Stern Stewart and Co counselling firm that endeavours to quantify riches made (or decimated) for shareholders by an organization. The WAI considers a greater number of variables than simply the benefits or share development of an organization. As indicated by this hypothesis,riches is made just if the profits of an organization surpass its expense of value.

Budgetary hypothesis says that the expense of value for an organization ought to be more noteworthy than the arrival accessible on danger free securities, for example, government bonds in light of the fact that an organization is more hazardous. (The more noteworthy the danger a speculator expect, the more noteworthy the arrival he or she ought to require.) So, if an organization's profits don't surpass its expense of value, then shareholders ought to contribute their cash somewhere else. At the end of the day, as per the WAI, if return is not exactly the expense of value, the organization is really pulverizing shareholder esteem.

The WAI considers a greater number of variables than simply the benefits or share development of an organization. As indicated by this hypothesis, riches is made just if the profits of an organization surpass its expense of Equity.Financial hypothesis says that the expense of Equity for an organization ought to be more prominent than the arrival accessible on sans risk securities, for example, government bonds in light of the fact that an organization is more hazardous. (The more noteworthy the Risk a speculator accept, the more noteworthy the arrival he or she ought to require.) So, if an organization's profits don't surpass its expense of Equity, then shareholders ought to contribute their cash somewhere else.

Advertisements



Looking for Similar Definitions & Concepts, Search Business Concepts