Question
This leads the CFO to ask you team to look at how the market value of ACME is compared to the industry and research how
This leads the CFO to ask you team to look at how the market value of ACME is compared to the industry and research how you can show not only this value but come up with justification for the capital investments being made. Your team discusses this and has determined EVA (Economic Value Added) as well as MVA (Market Value Added) concepts need to be established for the corporation. Use the following table as a guide: *12% here is a plug number. This will be different than the number you calculated in Task 3. Compute the P/E ratio and market capitalization for everyone. Compute the MVA and EVA for all. Compare and contrast the ratios; what do the ratios convey to the investing public? How would you present these internally and externally? Make recommendations to management from your analysis
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