Which of the following statements is most correct?
A) If two firms have the same ROE and the same level of risk, they must also have the same EVA.
B) If a firm has positive EVA, this implies that its ROE exceeds its cost of equity.
C) If a firm has positive ROE, this implies that its EVA is also positive.
D) Statements b and c are correct.
E) All of the statements above are correct.

Question

Quizplus · Accepted Answer

EVA (Economic Value Added) is positive when a firm's ROE (Return on Equity) exceeds its cost of equity, indicating that the firm is generating returns above the required rate.

Which of the Following Statements Is Most Correct