In the previous question, I was asked to valued the company performance using return on equity and return on asset, however, now the question is

If we make the assumptions that (1) the business risk is exactly the same for both firms and (2) that markets are efficient, which firm has been creating more value over the last 3 years? Through which driver of value creation? You might want to compute market leverage for both firms to answer this question.

During the class, our professor provide us with the value creation formula as below

can you show me the relation between the following method and the question? Which factors do I need to analyze?

411:55 27208/ VPN @ 100% Z Q 5 K7 B I U abe A rsm433 Value WACC - g Loblaw 29 Media General Berkshire Value, Growth and ROIC NOPAT x (1-g/ROIC) Session5_2020 Value WACC - g pdf-40 . Not directly used in practice: growth and ROIC vary Molycrop over time. Session6_2020 . But to keep in mind to understand what drives value! GRAPHER & WHAT CREAT UPS_vs_Fedex_... . This is the logic behind the DCF approach. 87721452-Fedex-VS-U... 30 Example 2