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ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS

Year 2018, Volume: 8 Issue: 1, 76 - 79, 30.12.2018
https://doi.org/10.17261/Pressacademia.2018.985

Abstract

Purpose - Recent studies focus on the corporate firm value and relation with financial parameters. This study reveals the interaction

between economic value added on corporate firm value and specific financial parameters such as P/E, WACC, ROE and ROIC. This analysis

focuses primarily on how corporate value is effected by the other variables and the duration that this influence leads.

Methodology – The quarterly data is derived for public banks in Turkish markets for the period 2006Q1-2018Q3. In the light of the data

obtained, PE, ROE, ROIC, WACC and WACCEVA values calculated for seven public banks. Each financial indicator was analyzed in terms of

trend and it was decided that the existing deterministic components should be eliminated in order not to affect the analysis result.

Findings- The summarized results indicate different occasions for each stock such as economic value added has significant effect on firm

value for couple of the firms and WACC and EVA variables have one period lagged effect for all stocks.

Conclusion- We indicate that firm value is effected from financial measures and further analysis should focus on investor buy/sell behaviors

in time lags.

References

  • Abhyankar, A., Ho, K. Y. and Zhao, H. (2005). Long-run post-merger stock performance of UK acquiring firms: a stochastic dominance perspective, Applied Financial Economics, 15, 679–90.
  • Alonso, P. A., Iturriaga, F. J. L. and Sanz, J. A. R. (2005). Financial decisions and growth opportunities: a Spanish firm’s panel data analysis,
  • Applied Financial Economics, 15, 391–407.
  • Atchyuthan N. and R. Vijayakumaran (2017). The determinants of price earnings ratio: Evidence from Sri Lankan Listed Manufacturing companies Conference: Conference: Twenty-Fourth Annual Sessions of Jaffna Science Association, At Jaffna Sri Lanka, Volume: 24
  • Becchetti, L. and Adriani, F. (2004). Do high-tech stock prices revert to their ‘fundamental’ value?, Applied Financial Economics, 14, 461–76
  • Brio, E. D., Miguel, A. D. and Pindado, J. (2003). Investment and firm value: an analysis using panel data, Applied Financial Economics, 13, 893–903.
  • Firth, M. (1998). IPO profit forecasts and their role in signalling firm value and explaining post-listing returns, Applied Financial Economics,8, 29–39.
  • Jones, E. and Danbolt, J. (2004). Joint venture investments and the market value of the firm, Applied Financial Economics, 14, 1325–31.
  • Keasey, K. and Short, H. (1997). Equity retention and initial public offerings: the influence of signalling and entrenchment effects, Applied Financial Economics, 7, 75–85.
  • Naceur, S. B. and Goaied, M. (2002). The relationship between dividend policy, financial structure, profitability and firm value, Applied Financial Economics, 12, 843–49.
  • Naceur, S. B. and Goaied, M. (2004). The value relevance of accounting and financial information: panel data evidence, Applied Financial Economics, 14, 1219–24.
  • Poker J. H., V. M. Murakami and M. M. Belli (2015). Relation between EVA and Capital Structure in the Worldwide Steel Mill Industry in Economic Crises: A Study from 2006 to 2011. International Proceedings of Economics Development and Research IPEDR vol.85 (2015), IACSIT Press, Singapore.
  • Ramcharran H. (2002). An Empirical Analysis of the Determiants of P/E ratio in emerging markets. Emerging Markets Review, Volume 3, Issue 2.
Year 2018, Volume: 8 Issue: 1, 76 - 79, 30.12.2018
https://doi.org/10.17261/Pressacademia.2018.985

Abstract

References

  • Abhyankar, A., Ho, K. Y. and Zhao, H. (2005). Long-run post-merger stock performance of UK acquiring firms: a stochastic dominance perspective, Applied Financial Economics, 15, 679–90.
  • Alonso, P. A., Iturriaga, F. J. L. and Sanz, J. A. R. (2005). Financial decisions and growth opportunities: a Spanish firm’s panel data analysis,
  • Applied Financial Economics, 15, 391–407.
  • Atchyuthan N. and R. Vijayakumaran (2017). The determinants of price earnings ratio: Evidence from Sri Lankan Listed Manufacturing companies Conference: Conference: Twenty-Fourth Annual Sessions of Jaffna Science Association, At Jaffna Sri Lanka, Volume: 24
  • Becchetti, L. and Adriani, F. (2004). Do high-tech stock prices revert to their ‘fundamental’ value?, Applied Financial Economics, 14, 461–76
  • Brio, E. D., Miguel, A. D. and Pindado, J. (2003). Investment and firm value: an analysis using panel data, Applied Financial Economics, 13, 893–903.
  • Firth, M. (1998). IPO profit forecasts and their role in signalling firm value and explaining post-listing returns, Applied Financial Economics,8, 29–39.
  • Jones, E. and Danbolt, J. (2004). Joint venture investments and the market value of the firm, Applied Financial Economics, 14, 1325–31.
  • Keasey, K. and Short, H. (1997). Equity retention and initial public offerings: the influence of signalling and entrenchment effects, Applied Financial Economics, 7, 75–85.
  • Naceur, S. B. and Goaied, M. (2002). The relationship between dividend policy, financial structure, profitability and firm value, Applied Financial Economics, 12, 843–49.
  • Naceur, S. B. and Goaied, M. (2004). The value relevance of accounting and financial information: panel data evidence, Applied Financial Economics, 14, 1219–24.
  • Poker J. H., V. M. Murakami and M. M. Belli (2015). Relation between EVA and Capital Structure in the Worldwide Steel Mill Industry in Economic Crises: A Study from 2006 to 2011. International Proceedings of Economics Development and Research IPEDR vol.85 (2015), IACSIT Press, Singapore.
  • Ramcharran H. (2002). An Empirical Analysis of the Determiants of P/E ratio in emerging markets. Emerging Markets Review, Volume 3, Issue 2.
There are 13 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Dilek Teker 0000-0002-3893-4015

Elcin Aykac Alp 0000-0001-9076-2102

Publication Date December 30, 2018
Published in Issue Year 2018 Volume: 8 Issue: 1

Cite

APA Teker, D., & Alp, E. A. (2018). ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS. PressAcademia Procedia, 8(1), 76-79. https://doi.org/10.17261/Pressacademia.2018.985
AMA Teker D, Alp EA. ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS. PAP. December 2018;8(1):76-79. doi:10.17261/Pressacademia.2018.985
Chicago Teker, Dilek, and Elcin Aykac Alp. “ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS”. PressAcademia Procedia 8, no. 1 (December 2018): 76-79. https://doi.org/10.17261/Pressacademia.2018.985.
EndNote Teker D, Alp EA (December 1, 2018) ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS. PressAcademia Procedia 8 1 76–79.
IEEE D. Teker and E. A. Alp, “ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS”, PAP, vol. 8, no. 1, pp. 76–79, 2018, doi: 10.17261/Pressacademia.2018.985.
ISNAD Teker, Dilek - Alp, Elcin Aykac. “ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS”. PressAcademia Procedia 8/1 (December 2018), 76-79. https://doi.org/10.17261/Pressacademia.2018.985.
JAMA Teker D, Alp EA. ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS. PAP. 2018;8:76–79.
MLA Teker, Dilek and Elcin Aykac Alp. “ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS”. PressAcademia Procedia, vol. 8, no. 1, 2018, pp. 76-79, doi:10.17261/Pressacademia.2018.985.
Vancouver Teker D, Alp EA. ECONOMIC VALUE ADDED and CORPORATE FIRM VALUE IMPLICATIONS. PAP. 2018;8(1):76-9.

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