Impact of Capital Gearing on Shareholders’ Wealth: Market Value Added (MVA) and Economic Value Added (EVA) Approaches

  • S. Sakthivelu Ph.D Research Scholar Department of Commerce Kanchi Mamunivar Centre for Postgraduate Studies (Autonomous – Term-II) (Autonomous College with Potential for Excellence – Phase-II) [Re-accredited at ‘B++’ Grade by NAAC] (Government of Puducherry) Pondicherry University Puducherry – 605 008, India Phone: + (91) -9597310873
  • R. Azhagaiah Associate Professor in Commerce Kanchi Mamunivar Centre for Postgraduate Studies (Autonomous) (Government of Puducherry) Airport Road, Lawspet, Puducherry-605 008, India
Keywords: value of firms; firm performance


The study has chosen a sample of 31 firms in India, which have listing flag in National Stock Exchange (NSE), for the period from 2011 to 2018 using variables viz. change in dividend per share (∆DPS), change in return on equity capital employed (∆ROECE), change in retaining earnings (∆RE), change growth opportunity (∆GO), change in sales (∆Sales), as well as change in return on total assets (∆ROTA) as predictor variables and market value added momentum (MVAM) as well as economic value added momentum (EVAM) as proxy for shareholders’ wealth as response variables and used multiple regression for analysis. The result revealed that ∆Sales, ∆GO and ∆RE had significant impact on shareholders’ wealth (MVAM) of overall firms and ∆DPS, ∆Sales as well as ∆GO had significant impact on shareholders’ wealth (EVAM) of overall firms.


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