yospaghetti

WACC (cost of capital) is different from required rate of return on equity or cost of equity. I think in the residual income equation "r" is cost of equity, i could be wrong though.

Second question- if WACC decreases, then yes that $WACC (or dollar cost of capital) goes down, so you are subtracting a lower number, so EVA goes up. Does this make sense?