If a Company's Expected Return on Invested Capital Is Less

question 14

True/False

If a company's expected return on invested capital is less than its cost of equity, then the company must also have a negative market value added (MVA).

---

Definitions:

Performance

The manner in which an individual, team, or organization accomplishes tasks, goals, and objectives, often measured against pre-set standards.

Organization

A structured group of people working together towards a common goal, often characterized by a hierarchy of authority and division of labor.

Ethical Guidelines

Rules or principles designed to conduct behavior in accordance with recognized standards of right and wrong, guiding professionals in their decisions and actions.

Alternative Dispute-resolution

A range of processes, like mediation and arbitration, used to resolve conflicts outside of the courtroom.