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| Title |
An empirical assessment of economic value added
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| Author |
Alisiani, Ross
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| Department |
Department of Economics and Business
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| Institution |
Colorado College
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| Degree Type |
bachelor
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| Degree Name |
Bachelor of Arts
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| Type of Resource |
text
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| Digital Origin |
reformatted digital
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| Date Accepted |
2007
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| Date Digitized |
2009
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| Abstract |
This study provides an empirical investigation into the relatively new financial management tool, economic value added. Economic value added, or EVA, is claimed to be a better measurement of economic profit than traditional financial measures because it takes into account the cost of debt and equity capital. This paper contributes to the existing literature by examining the use of EV A as an investment tool. The study measures both the explanatory power of EVA as it relates to market capitalization relative to other measures and as it relates to stock price returns for companies that have adopted EVA management practices. Furthermore, it is investigated to determine if the market values companies with positive EVA values more than companies with negative EVA values. Using a sample of 9,990 firms totaling 31,192 firm-year observations, it was found that EVA is not a better explanatory measure than traditional measures and that EVA companies do not outperform non EVA firms. However, it was found that the market does value firms with a positive EV A more than those without.
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| Keywords |
Economic value added or EVA
Market capitalization or market cap
Stock returns
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| Rights Statement |
Copyright restrictions apply. Contact the author for permission to publish.
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| Extent |
59 p. : ill. ; 29 cm.
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| Note (thesis) |
Senior Thesis - Colorado College
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| Note (bibliography) |
Bibliography : p. 56-59
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| Publisher |
Colorado College
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| Place of Publication |
Colorado Springs, Colorado
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| Language |
eng
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| OCLC Identifier |
159958262
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| Handle |
http://hdl.handle.net/10176/coccc:2908
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| Attached Files |
| Name |
Description |
MIMEType |
Size |
Downloads |
Alisiani_Thesis_A1b.pdf
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master |
application/pdf |
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0 |
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