Comparing of the Effects of EVA (Economic Value Added) Spread and EVA Momentum on Stock Return

Subject Areas : Management Accounting

Zahra Poorzamani ¹ (دانشیار و عضو هیات علمی دانشگاه آزاد اسلامی واحد تهران مرکزی)
Hadiseh Arzee ² (کارشناسی ارشد حسابداری، دانشگاه آزاد اسلامی واحد تهران مرکزی)

Received: 2015-01-01 Accepted : 2015-04-04 Published : 2016-08-05

Keywords: EVA, EVA Spread, EVA Momentum, Stock Return,

Abstract :

Economic value added is a fundamental measure for performance evaluation and determination of firms’ value .On the other hand Economic value added Spread is a measure that counteracts the different firm size effects and compares the economic profitability of firms regardless of their different amount of capital. Economic value added Momentum calculates the proper amount of sale by determining EVA after deducting operating and financial costs. The objective of this study is to examine the effect of EVA Spread and EVA Momentum on stock return and compare these measures. 133 firms were chosen from Tehran Stock Exchange (statistical population) over years 2008 to 2012. Multiple linear regression models were used for analyzing data. The statistical method is panel data. Eviews and SPSS software were used for analyzing data. The results showed that all two variables have direct and meaningful relationship with stock return. EVA Spread is the most effective one and EVA Momentum is ranked second.

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