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EVA and the market value of a company
The
market
value
of equity
of a
profitable
company
XXXX Oy
1399 MFIM
140 FIM/share
Book
value
of
Equity
500 MFIM
50 FIM/share
Market value
premium
899 MFIM
(Market
Value
Added)
90
FIM/share
40 MFIM
49 MFIM
46 MFIM
44 MFIM
42 MFIM
/1.0
/1.41
/1.29
/1.18
/1.09
Hypothetical Example: Company XXXX produces positive EVA that grows steadily 5% a year. Thus the present value of EVA is:
51 MFIM
/1.68
Slide 17 of 21
