a company's expected return on invested capital is less than its cost of equity, then the company must also have a negative market value added

Question

Quizplus · Accepted Answer

A company's market value added (MVA) depends on various factors, not just the relationship between return on invested capital and cost of equity. MVA can be positive if other factors, like growth prospects or market conditions, are favorable.

A Company's Expected Return on Invested Capital Is Less Than