标题: EVA vs RI [打印本页] 作者: mamuka12 时间: 2011-7-13 14:49 标题: EVA vs RI
Isnt it the same thing?
Thought EVA is another method of calculating RI? Im slightly confused because on a practice test, it revealed different results for the same problem作者: luda002 时间: 2011-7-13 14:49
They're similar but EVA is different in that it uses WACC.
EVA = NOPAT - (WACC% x Total Cap) NOPAT = EBIT(1-T)
RI = NI - (cost of equity x BV)
EVA is economic value added to both shareholders and debt holders. RI is economic value of equity only.作者: benbenxiong 时间: 2011-7-13 14:49
thank you for ur explanation -- i understand that but my point was it should still reveal the same result.. no?作者: kickthatcfa 时间: 2011-7-13 14:49
they would
under the circumstances that:
a. WACC was calculated with the Book Value of Debt and Book Value of Equity
b. Interest rate on Debt used on the Income statement = rd used for WACC
