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Economic Value Added and Shareholder Wealth - An empirical study of relationship

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  • Ashok Banerjee

Abstract

The present study attempts to explore the supremacy of EVA over other variables in explaining the stock price performance. Five independent variables (Earning Per Share, Adjusted Return on Net Worth, Capital Productivity, Labour Productivity and Economic Value Added) are chosen to establish the relationship between shareholder wealth and financial variables. Market Value Added (MVA), which is a measure of shareholder wealth, is considered as the dependent variable. The above hypothesis is tested on the time series data. Nine industries are chosen for this purpose viz., Automobile, Cement, Cotton and Blended Yarn, Diversified, Drugs & Pharmaceuticals, Finished Steel, Paper, Tea and Coffee and Tyre.

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  • Ashok Banerjee, 1999. "Economic Value Added and Shareholder Wealth - An empirical study of relationship," Paradigm, , vol. 3(1), pages 99-133, January.
    • Handle: RePEc:sae:padigm:v:3:y:1999:i:1:p:99-133
    DOI: 10.1177/0971890719990111
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