Economic Value Added (EVA) is economic profit that is Net Operating profit After Tax deducted Weighted Average capital cost (include equity and debt capital cost).

经济增加值EVA指企业税后净经营收益扣除包括股权和债务的加权资本成本后的经济利润。

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A simple example reveals that the existing weighted average cost of capital (WACC) formula for valuation conflicts with the principle of value additivity.

一个简单的例子揭示了现有的加权平均资本成本(WACC)计算公式违背了价值的可加性原理。

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The discount rate used to calculate the company's model is the weighted average cost of capital.

本公司用于计算折现率的模型是加权平均资金成本。

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It has made negative economic earnings (meaning its return on invested capital has been lower than its weighted average cost of capital) every year going back to 1998 when my model begins.

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It would need to nearly triple this ROIC to exceed its weighted average cost of capital ( WACC) of 8.2%.

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It would need to double this to cover its 8% weighted average cost of capital ( WACC) and start earning positive economic profits.

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