Question
Which of the following statements are true about economic value added (EVA)? EVA is the difference between the ROA and the interest rate paid on
Which of the following statements are true about economic value added (EVA)?
EVA is the difference between the ROA and the interest rate paid on debt, multiplied by the capital invested in the company.
EVA is positive only if ROE is higher than the interest rate on debt.
EVA is the difference between the ROA and the opportunity cost of capital, multiplied by the capital invested in the company.
It is also called market value added (MVA).
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Corporate Finance Reader
Authors: Robert W. Kolb
2nd Edition
1878975536, 978-1878975539
