Which of the Following Statements Is CORRECT

question 69

Multiple Choice

Which of the following statements is CORRECT?

• A) The primary difference between EVA and accounting net income is that when net income is calculated, a deduction is made to account for the cost of common equity, whereas EVA represents net income before deducting the cost of the equity capital the firm uses.
• B) MVA gives us an idea about how much value a firm's management has added during the last year.
• C) MVA stands for market value added, and it is defined as follows:
• MVA = (Shares outstanding)(Stock price) + Book value of common equity.
• D) EVA stands for economic value added, and it is defined as follows:
• EVA = EBIT(1 − T) − (Investor-supplied op.capital) × (A − T cost of capital).
• E) EVA gives us an idea about how much value a firm's management has added over the firm's life.

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Definitions:

Achievement Goal Theory

A theory in psychology that focuses on how individuals are motivated by their goals to achieve in academic and other performance settings.

Self-determination Theory

A theory of motivation that emphasizes the role of intrinsic motivations and psychological needs in driving human behavior.

Social Comparison Theory

The idea that individuals determine their own social and personal worth based on how they stack up against others they perceive as somehow faring better or worse.

Theory of Planned Behavior

A psychological theory that predicts an individual's intention to engage in a behavior at a specific time and place, considering attitudes, subjective norms, and perceived control.