If 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 (MVA).

Question

Quizplus · Accepted Answer

A company's market value added (MVA) is determined by the market's perception of its future growth and profitability, not solely by the current relationship between return on invested capital and cost of equity.

If a Company's Expected Return on Invested Capital Is Less