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EVA as an Indicator of Shareholders' Value Creation

Journal: Accounting and Finance (Vol.1, No. 67)

Publication Date:

Authors : ;

Page : 66-70

Keywords : EVA; shareholders; weighted average cost of capital; market performance; value creation;

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Abstract

The present paper investigates the EVA trend and its relationship with shareholders' value creation in corporate enterprises in India. Shareholders' value maximization is reflected in the market performance. The impact analysis of EVA on market price has been tested for nine years (2004-05 to 2012-13) with the help of linear regression, correlation coefficient and adjusted R-square. Results show that EVA has a positive impact on shareholders' value creation. It is hoped that it will be useful to the investors for decision-making and contribute to the value investing.

Last modified: 2015-05-14 17:24:44