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Posts tagged as “Cost of Equity”

Economic Value Added (EVA)

Economic Value Added (EVA) is a financial performance metric that measures a company's true economic profit—the value created in excess of the required return of the company's investors.

Shareholder Value Analysis (SVA)

Shareholder Value Analysis (SVA), often associated with the work of Alfred Rappaport, is a sophisticated approach to financial management and strategic decision-making. It is founded on the principle that the primary objective of a company should be to maximize the economic value created for its equity shareholders.

The Capital Asset Pricing Model (CAPM)

The Capital Asset Pricing Model (CAPM), developed in the 1960s by William Sharpe, John Lintner, and Jan Mossin, provides a framework to evaluate the expected return of an investment relative to its risk.

Cost of Capital

Cost of capital is the minimum return a business must earn on its investments to justify the cost of financing and satisfy expectations of both debt holders and equity investors.