Idea
The rising
importance of intangible assets for the valuation of companies raises a
number
of questions. How can we value knowledge-intensive and hence human capital intensive
firms
appropriately? Traditional valuation and accounting techniques have limited
applicability in this context
and have to be modified to account for recent developments.
Our management
tool
"Human Capital Pricing Model (HCPM)"
enables both researchers and mangers to value human capital and investments
in human capital using capital market theory in a risk-adjusted manner. The
approximate quantification of return on human capital should further improve
the optimal allocation of funds in the firm and thereby increase shareholder
value.