An empirical study into economic value added (EVA) as an indicator of share price in the South African context.
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Date
2003
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Abstract
This research was conducted to determine whether the intrinsic share values that are
obtained using the EVA valuation model are an indicator of share prices as quoted on
the JSE Securities Exchange. The research did not differentiated between companies
that have implemented EVA in South Africa and those that have not.
The research was conducted by performing EVA intrinsic share price calculations for
43 companies listed on the JSE Securities Exchange. These EVA share prices were
correlated to the actual share price as quoted on the JSE Securities Exchange, for the
current and lagged periods of one and two years. The resultant correlation coefficients
were tested for significance at the 5% level.
The results show that there is no statistically significant correlation between the EVA
intrinsic share values and the share price as quoted on the JSE in both the same and
lagged periods. Hence we cannot conclude that EVA is an indicator of share price.
Description
Thesis(MBA)-University of Natal, Durban, 2003.
Keywords
Economic value added., Stocks--Prices., Stocks--South Africa., Theses--Business administration.