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EVA Analysis
Questions/Discussions
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Negative EVA
Hi
I revised the calculation on EVA using Rirchard S's method as per the prior thread below, however this yields negative EVA through the projection years hence TV as % of TEV is >100%, I guess this renders EVA useless in valuing the company right? Which also means from EVA perspective, it is re...
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Capital charge under EVA
Hi, I think the capital charge is supposed to be calculated using the prior year's ending total capital. So, 2006's capital charge should be 11% of 2005's total capital or $87,949, or $9,674; 2007's should be $10,956, and so on. This is using the figures from the core model not from the video. Is th...
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Enhancements to the core model- Part II EVA analysis
Hi,
I am watching the video - EVA analysis. The total capital (debt + equity) figures that you provided in the downloaded template are different from the figures that are showing in your template on the video. Thus, I have a different valuation base on the downloaded template. For 2006, the figure ...
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Link: http://people.stern.nyu.edu/adamodar/New_Home_Page/lectures/eva.html
His comments:
Many firms use the book value of capital invested as their measure of capital invested. To the degree that book value reflects accounting choices made over time, this may not be true. In cases where firms alter their capital invested through their operating decisions (for example, by using operating leases), the capital and the after-tax operating income have to be adjusted to reflect true capital invested. Read More