.EVA is defined as the dollar amount of net operating profit after tax(NOPAT) minus the dollar charge for capital (both debt and equity)obtained by multiplying the percentage of weighted average cost ofcapital (WACC) (Cordeiro and Kent, 2001). EVA is an estimate of the amount by which earnings exceed or fall short of the rate of return shareholders and lenders could get by investing in other securities of comparable risk and includes a charge against profit for the cost of all the capital a company employs. They had used
EVA as the independent variable of their study. In this study, EVA per share is used as the independent variable of the study. In this study, EVA is calculated based on Cordeiro and Kent (2001) which
is as follows:
EVA = NOPAT – (WACC X Invested capital).
where,
NOPAT = Profit and loss before tax + Interest expense – Income taxes – Tax shield on interest (Tax rate X Interest expense),
Invested capital = Short term debt + Long term debt + Minority interest + Shareholders equity1,
WACC = Cost of debt X {Total debt / (Total debt + CMVE)} X (1 –Tax) + [Cost of equity X { (CMVE /( Total debt+ CMVE))}]2,
CMVE = Company’s share price X Total shares outstanding,
Market value of company = CMVE + Total debt + Minority interest, Cost of equity is calculated by using CAPM model3 Exploratory designs and correlational method have been chosen forthis study, since the purpose of the study is to explore the relationship of EVA and company performance. The analysis will be using panel pool data regression models which are only available from econometrics software tools. The analysis will use time series and cross section analysis simultaneously. The findings on each performance tool and stock return is analysed at this level. This analysis tool is used since panel pool data regression is able to
take account for larger sample sizes and longer periods of study concurrently. The sample of the companies comprise most of the public listed companies in Bursa Malaysia (and which data available) over the period 1993 to 2002. Based on these criteria, for period between 1997 to 2002, 245 samples of Main Board companies were selected which involved 1440 observations. While for period between 1993 to 2002, 75 Main Board companies were selected which involved 750 observations. The longer period has less observation due to constraint of data availability.
参考资料：有道