Impact of Capital Gearing on Shareholdersâ€™ Wealth: Market Value Added (MVA) and Economic Value Added (EVA) Approaches
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 (âˆ†DPS), change in return on equity capital employed (âˆ†ROECE), change in retaining earnings (âˆ†RE), change growth opportunity (âˆ†GO), change in sales (âˆ†Sales), as well as change in return on total assets (âˆ†ROTA) as predictor variables and market value added momentum (MVAM) as well as economic value added momentum (EVAM) as proxy for shareholdersâ€™ wealth as response variables and used multiple regression for analysis. The result revealed that âˆ†Sales, âˆ†GO and âˆ†RE had significant impact on shareholdersâ€™ wealth (MVAM) of overall firms and âˆ†DPS, âˆ†Sales as well as âˆ†GO had significant impact on shareholdersâ€™ wealth (EVAM) of overall firms.
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