Panigrahi, Shrikant and Yuserrie, Zainuddin and Noor Azlinna, Azizan (2015) Empirical Analysis on Impact of Economic Value Added on Shareholder’s Value: A Perspective from Malaysian Construction Companies. Australian Journal of Basic and Applied Sciences, 9 (2). pp. 64-72. ISSN 1991-8178. (Published)
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Abstract
Background: Economic value added (EVA) is a concept developed Stern Stewart helps to identify true profitability of the organization due to consideration of cost of equity. Construction companies have been taken under consideration for this study. Objective: To provide an alternative measurement tool for the Malaysian construction companies that identifies true economic profit and enhance shareholder‟s value. Cross sectional secondary data are used of the selected companies for the period of 10 years from 2003 to 2012 Results: The result found significant influence of EVA on shareholder‟s value creation. It was also noticed from the trend analysis that from the 28 companies only 10 companies were having positive EVA whereas the remaining has destroying the shareholder value. The reason for negative EVA is high cost of equity. Conclusion: Thus in the proposed model it is confirmed that EVA as a value based performance tool dominates the shareholder value. Hence managers are suggested to pay more focus on the importance of EVA and its benefits for the shareholder‟s wealth creation and improve company performance.
| Item Type: | Article |
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| Uncontrolled Keywords: | Economic value added, Market Value added, Shareholder value, Malaysia |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
| Faculty/Division: | Faculty of Industrial Management |
| Depositing User: | Mrs. Neng Sury Sulaiman |
| Date Deposited: | 02 Nov 2015 06:14 |
| Last Modified: | 29 Aug 2018 04:15 |
| URI: | http://umpir.ump.edu.my/id/eprint/10970 |
| Download Statistic: | View Download Statistics |
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