Firm Value

Abstract

The chapter explains the meaning of irms from the perspective of economic researchers in the past to the views of current dates. Traditional model of a irm’s value is linked irmly with shareholders’ value. This traditional view is used in inance and in business for many years. To enhance a irms’ value, we need to maximize shareholders’ value. According to this view, any activities in irms can increase the value of irms if it increases the value of the Shareholders. However, traditional concept of shareholders’ value as the explanation to irms’ value is challenged by a group of researchers. This group believes that value of irms should not be based on just shareholders but should include all groups of stakehold- ers. After giving some ideas on the meaning of irm, the corporate sustainability value of irm in terms of economics and inance is explained.