a. Explain, in your own words, the significance of Market-Implied EVA Momentum and the FVA component of a firm’s Enterprise Value.
b. According to figure 5A.36, what was the Market-Implied EVA Momentum rate baked into Amazon’s share price as of March 28, 2013? What was the expected EVA growth in dollar terms? Assuming EVA will grow according to this rate, what is Amazon’s implied EVA target for 2022?
c. Repeat the previous question by interpreting the same metrics for Costco.
d. Amazon’s sales growth was 27.1% in 2012. Assume sales grow at the same rate in 2013 and Amazon meets the implied EVA improvement target of $855MM. What is the resulting:
i. EVA in dollar terms?
ii. EVA Margin?
iii. EVA Momentum?
How do these 2013 estimates compare with the historical EVA Margin and Momentum rates?