The concept of Economics Value Added (EVA) is the same as the concept of Residual Income (RI). we have the following two equations to calculate the market value of a firm:  

Market Value of The Firm = Book Value of Equity + PV(All futures RIs) + MV(Debt)

Market Value of The Firm = Total Capital + PV(All futures EVAs) Based on the above two equations, clearly explain whether we can combine the above two questions together to conclude the following relationship: 

Total Capital = Book Value of Equity + MV(Debt)

Answer rating: 100% (QA)

Can Total Capital be equated to Book Value of Equity MVDebt While both equations represent methods f... View the full answer