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The concept of Economics Value Added (EVA) is the same as the concept of Residual Income (RI). we have the following two equations to calculate


The concept of Economics Value Added (EVA) is the same as the concept of Residual Income (RI). we have the following two equations to calculate the market value of a firm:  

Market Value of The Firm = Book Value of Equity + PV(All futures RIs) + MV(Debt)

Market Value of The Firm = Total Capital + PV(All futures EVAs) Based on the above two equations, clearly explain whether we can combine the above two questions together to conclude the following relationship: 

Total Capital = Book Value of Equity + MV(Debt)

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