• Can EVA or CVA be a Superior Method of Share Valuation

    Pages: 7

    This 7 page paper is a proposal for a project or dissertation to investigate is the use of economic value-added or cash value added may be a less volatile and more reliable method of assessing the performance of a company rather than only the performance of a share. The bibliography cites 5 sources.

    File: TS14_TEEVACAPM.rtf

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    Can EVA or CVA be a Superior Method of Share Valuation United Kingdom, November 2004. To Use This Report  Correctly, 1. Introduction The way in which firms are valued are divergent, The measures used by shareholders tend to be biased in their approach, measuring not the  value or profit of a firm, but the expectation of the shareholders towards the way share prices will move. This will reflect the value that is created, but there are  also many other influences that will have a greater level of impact. This creates a difficult position for management, as their primary stakeholder groups appear to be demanding both  short term results as well as safeguarding the long term future. The value of many of the models have been demonstrated as limited and other approaches to indicating the way  in which a firm is really performing and that take a longer term approach may be more reliable. Therefore the use of simpler tools such as economic value added (EVA)  or cash value added (CVA) may be a better indication of performance to reflects the patterns of the company rather than shares, indicating the way resources are being used by  management as well as the skill of the management. 2. Purpose of the Study The purpose of the study is to identify if there is any superiority with the use  of EVA or CVA has to indicate the way ion which a company is actually performing and as such the longer term performance expectations. Measures such as this may still  be subject to the environmental changes, but may be more reliable that the exaggerated reactions of shareholders when there is news, good or bad, regarding the expected results of a 

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