Retracing the steps, it should also be quite clear that the
pathway to value enhancement will vary across firms.
Suboptimalmanagementcanmanifestitselfindifferentways
fordifferentfirms.Forfirmswhereexistingassetsarepoorly
managed, the increase in value will be primarily from
managing those assets moreefficiently—higher cash flows
from theseassets and efficiency growth. For firms where
investmentpolicyis soundbut financingpolicy isnot, the
increaseinvaluewillcomefromchangingthemixofdebt
andequityandachievingalowercostofcapital.Table13.1
considerspotentialproblemsinexistingmanagement,fixesto
these problems, and the value consequences.
TABLE 13.1Ways of Increasing Value