7. The relationship between the book value of shareholders' equity and the firm's Market Aa Aa Value Added (MVA) and Economic Value Added (EVA) Yesterday, Water and Power Co. released its 2015 annual report on the company's website. While reading the report for her boss, Asha came across several terms about which she was unsure. She leaned around the wall of her cubicle and asked her colleague Rafael, for help. Asha Rafael, do you have a second to help me with my reading of Water & Power's annual report? I've come across several unfamiliar terms, and I want to make sure that I'm interpreting the data and management's comments correctly. For example, one of the footnotes to the financial statements uses 'the book value of Water & Power's shares and then in another place, it uses Market Value Added." I've never encountered those terms before. Do you know what they're talking about? Rafael Yes, I do. Let's see if we can make these terms make sense by talking through their meaning and their significance to investors. The term book value has several uses. It can refer to a single asset or the company as a whole. When refeming to an individual asset, such as a piece of equipment, book value refers to the asset's r adjusted for any accumulated depreciation or amortization expense. The value, or difference between these two values, is called the asset's book value. In contrast, when the term refers to the entire company, it means the total value of the company's as reported in the firm's Asha That makes sense. So, what makes this value important to investors is that it is value that can change but only due to a couple of events, including the of Treasury stock, the sale of new common or preferred shares, and the payment of Equally important, it change in response to changes in the market prices of the fim's shares. Rafael Right! So, how useful would a mm's book value be for a the performance of Water & ssessing Power's management