Relationship Between Economic Value Added and Market Value Added: An Empirical Study of BSE S&P Sensex Companies for 2016-2017

Shareholders’ wealth maximization is regarded to be the prime goal of organizations. MVA is generally believed to be representative of shareholder value creation. It is perceived by managers of corporations that MVA can be maximized by maximizing EVA. EVA is endogenous to the organization whereas MVA is exogenous to the organization. In this study EVA has been treated as independent variable and MVA as dependent variable. Through Correlation and regression analysis the relationship between EVA and MVA has been studied. The outcome of the analysis indicates that there is no significant relationship between EVA and MVA of BSE S&P Sensex Companies during 2016-2017.