ERM Glossary: Economic value and economic
value added (EVA)
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Economic value (to shareholders)
is the present value of all expected future transfers to shareholders,
determined on a realistic economic basis. It is also called ‘shareholder value’
or ‘embedded value’. The ‘economic value added’ of an action is the amount that
is expected to be (or has been) added to overall economic value by a given
action.
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