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Authors
Affiliations
1 Avinashilingam School of Management Technology, Avinashilingam Institute for Home Science and Higher Education for Women, Coimbatore, Tamil Nadu, IN
Source
Journal of Commerce and Accounting Research, Vol 4, No 3-4 (2015), Pagination: 19-26
Abstract
In today's competitive world, corporate companies all around the world are trying to maximise the wealth of their shareholders in order to gain market value as well as satisfy their stakeholders.With the gaining popularity of value based performance measures like Economic Value Added (EVA), Total Shareholder Return (TSR), Cash Value Added (CVA) etc., many corporate companies in India have started assessing their value in terms of these measures. This paper investigates the relationship between EVA and share prices of select companies in BSE-SENSEX for a period of six years from 2008 to 2013. The study focuses on the explanatory power of EVA with respect to share prices of the selected companies. In turn, the performance of the selected companies belonging to different sectors in BSE-SENSEX was analysed using EVA. The volatile nature of the capital markets characterised by various speculative activities have a greater influence on share prices, eventually undermining the impact of performance metrics on them. Thus, the findings of the study enumerates that EVA does not have a considerable explanatory power on share prices.
Keywords
Economic Value Added, Share Prices, SENSEX, NOPAT, Value Based Performance Measure.
