Which of the Following Statements Is Correct?
A) MVA Gives $\times$

question 44

Multiple Choice

Which of the following statements is correct?

• A) MVA gives us an idea about how much value a firm's management has added during the last year.
• B) MVA stands for market value added, and it is defined as follows:
• MVA = (Shares outstanding) \(\times\) (Stock price) + Book value of common equity
• C) EVA stands for economic value added, and it is defined as follows:
• EVA = (Operating capita) \(\times\) (ROIC - WACC)
• D) 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:

External Forces

Factors outside an organization that can affect its operations and success, such as economic conditions, competition, and regulatory changes.

Severance Pay

Severance pay is compensation provided to an employee after termination from a job, usually based on length of service or the terms of employment.

Terminated Employees

Individuals whose employment has been ended by their employer, for reasons that may include redundancy, misconduct, or mutual agreement.

Markov Analysis

A statistical technique used to forecast future behavior based on historical data, often applied in decision-making processes.