Business Performance Measurement by Economic Value Added: Case Study of Agri-Business Group

Abstract

     This research shows benefits of Economic Value Added (EVA) for public firms paying dividends regularly in the stock exchange of Thailand (SET). Data were collected from 41 firms of Agro and Food Industrial groups on 2007. The sample size contains 26 positive-EVA companies and 15 negative-EVA ones. Not only EVA can show firm profitability, but high EVA firms also have lower costs of capital (WACC) and higher stock value (P/BV). However, larger firms show lower EVA. SET should promote EVA announcement for Thai listed companies. Public firms can gain benefits of lower fund-raising costs and enhancement of their stock values. Moreover, high-EVA firms will pay dividends at high yields. These stocks are beneficial for investors who prefer dividend payments.