Through the Economic-Value-Added(EVA)valuation model,the expected market value of equity can be determined by adding the book value of equity with the present value of expected EVAs under the assumption of constant re...Through the Economic-Value-Added(EVA)valuation model,the expected market value of equity can be determined by adding the book value of equity with the present value of expected EVAs under the assumption of constant required return and constant return on equity.The equation of EVA valuation model has taken its shape under the assumption of constant required return and constant return on equity.However,a large body of empirical evidence indicates that required rate of return never remain constant.The EVA-valuation model formulated under constant required return cannot be implemented under the scenario of changing required return.In this study,we explored whether the EVA valuation model could be implemented under changing required return by making any changes in the model and found that it could be implemented under the scenario of changing required return by replacing the book value of the equity of the existing model with the present value of required earnings or normal market earnings.We further examined whether the explanatory ability of the EVA valuation model under the assumption of changing required return is better than that of the valuation model under the assumption of constant required return.Relative information content analyses were conducted by considering sample of the intrinsic value of equities determined by valuation models and the market value of equities of 69 large-cap,88 mid-cap,and 79 small-cap companies.The results showed that the EVA-based valuation model with changing normal market return outperformed the EVA-based valuation model with constant required return.展开更多
Abundant liquidity is expected to be the mainstay that helps to prop up the nation’s stock markets, according to the Economic Information Daily’s review of financial institutions’ research reports. Excerpts follow.
In the recent releasing Textile Industry Invigorating Plan,"givingattention to both domestlc and overseas markets"is put into a keyposition.Under a series policies,such as increasing the tax rebaterate for t...In the recent releasing Textile Industry Invigorating Plan,"givingattention to both domestlc and overseas markets"is put into a keyposition.Under a series policies,such as increasing the tax rebaterate for textile and garment exports,and granting loan for SME,thefurther development of this industry is expectative.Otherwise,weshould know that it costs time for demand driving.This need ourpatients.The only questionis how much time we have to wait.展开更多
文摘Through the Economic-Value-Added(EVA)valuation model,the expected market value of equity can be determined by adding the book value of equity with the present value of expected EVAs under the assumption of constant required return and constant return on equity.The equation of EVA valuation model has taken its shape under the assumption of constant required return and constant return on equity.However,a large body of empirical evidence indicates that required rate of return never remain constant.The EVA-valuation model formulated under constant required return cannot be implemented under the scenario of changing required return.In this study,we explored whether the EVA valuation model could be implemented under changing required return by making any changes in the model and found that it could be implemented under the scenario of changing required return by replacing the book value of the equity of the existing model with the present value of required earnings or normal market earnings.We further examined whether the explanatory ability of the EVA valuation model under the assumption of changing required return is better than that of the valuation model under the assumption of constant required return.Relative information content analyses were conducted by considering sample of the intrinsic value of equities determined by valuation models and the market value of equities of 69 large-cap,88 mid-cap,and 79 small-cap companies.The results showed that the EVA-based valuation model with changing normal market return outperformed the EVA-based valuation model with constant required return.
文摘Abundant liquidity is expected to be the mainstay that helps to prop up the nation’s stock markets, according to the Economic Information Daily’s review of financial institutions’ research reports. Excerpts follow.
文摘In the recent releasing Textile Industry Invigorating Plan,"givingattention to both domestlc and overseas markets"is put into a keyposition.Under a series policies,such as increasing the tax rebaterate for textile and garment exports,and granting loan for SME,thefurther development of this industry is expectative.Otherwise,weshould know that it costs time for demand driving.This need ourpatients.The only questionis how much time we have to wait.
