___ is a period measure that attempts to capture a firm’s ability to add value for...
___ is a period measure that attempts to capture a firm’s ability to add value for shareholders, after accounting for the requirements of other stakeholders.
a. Economic value added
b. Discounted cash flow analysis
c. Price-earnings measure
d. all of the above
Homework Answers
Answer
Correct Option = option (a) Economic Value Added
Explanation :
- Economic Value Added is a technique to measure the company’s performance by computing the ‘Value Creation’ made by the company in terms of shareholder’s wealth.
- It measures that what company has earned for itself to grow after deducting all expenses and borrowed cost (cost of debt,cost of equity etc)
- If a company has a positive Economic Value Added then it means that it is adding value to the overall shareholder’s and company’s wealth.
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