Which of the Following Statements Is CORRECT

question 121

Multiple Choice

Which of the following statements is CORRECT?

• A)MVA stands for market value added, and it is defined as follows:MVA = (Shares outstanding)(Stock price) + Book value of common equity.
• B)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.
• C)MVA gives us an idea about how much value a firm's management has added during the last year.
• D)EVA gives us an idea about how much value a firm's management has added over the firm's life.
• E)EVA stands for economic value added, and it is defined as follows:EVA = NOPAT − (Total invested capital)(AT cost of capital %)

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Definitions:

Thyroid

A gland in the neck that produces hormones regulating growth and metabolism.

Adrenal

Pertaining to the adrenal glands, small glandular organs located above the kidneys that produce hormones like adrenaline and corticosteroids.

Parathyroid

Small glands located behind the thyroid that play a crucial role in regulating the body's calcium levels.

Stressor

Any stimulus that produces stress.