What you say here doesn't make any sense. Shareholder value is increased by effective use of capital by the company. Plowing your margin back into your business

What you say here doesn't make any sense. Shareholder value is increased by effective use of capital by the company. Plowing your margin back into your business if it can result in growth is good for shareholders, since the stock will rise, whereas plowing that profit into ill-advised acquisitions and executive bonuses is probably less so. At the same time, issuing a direct dividend to shareholders when there is little use for that capital for future growth is (obviously) good for shareholders, but issuing the same dividend when that money could have been used to increase the market cap of the business through growth is bad. In other words, the specific mechanism of how a company uses profit (or more specifically, free cash flow) does not have any inherent value to shareholders (dividends, buybacks, paying down debt, or re-investment.) It's only in the context of the opportunity cost of how that capital could have been used elsewhere that you can measure the value for shareholders.