The EVA measure has the benefit of being conceptually simple,applicable to business units (in addition to the firm as a whole),but is uncorrelated with stock price performance.

Question

Quizplus · Accepted Answer

The statement is incorrect, as EVA is actually highly correlated with stock price performance. This correlation arises because EVA is essentially a measure of how much value a company is adding to its shareholders, and thus companies with high EVA tend to have higher stock prices.

The EVA Measure Has the Benefit of Being Conceptually Simple,applicable