An Empirical Study On The Impact Of Structure Of Shareholder On EVA

EVA became so popularity as a revolutionary performance measure when it was proposed by Stern Stewart & Co. at the end of 1980' s . Then it has been examed by scholars using empirical and theoretical research methods. The validity and superiority of EVA were affirmed. In the past years EVA was used in China. But we find its validity and superiority aren' t marked when we exam it using the empirical research method. There is a huge difference in the examination results between china and foreign country. The reason was due to structure of shareholder, accountant adjustments, market validity and information quality of report forms.This paper starts from structure of shareholder. We think non-circulation stock conduces overrating weighted average capital cost rate when we calculate EVA in china. This reason makes the result that EVA is far form the real value badly. So the validity of EVA is reduction. This paper is aim to prove structure of shareholder is the main reason that impacts the validity of EVA in china and tell us how far EVA is from the real value. The meaning of this paper is;1. helping to improve the validity and feasibility of EVA in our country;2. evaluating our public corporation' s ability of creating value in a right way;3.helping to improve the fairness of prompting in our public corporation;4. reflecting the import that carries out full currency to our stock market' s healthy development.Then we used the empirical research method to prove our hypothesis. Five conclusions result from the paper: 1. there are several reasons cause the result that there is a low correlation between EVA and MVA in our country. Structure of shareholder is one of them;2. Except structure of shareholder, other factors aren' t the mainstream. The impact is marked that using capital cost rate and price of common stock replace non-circulate stocks';3. Structure of capital stock really can make a huge departure from real value when we calculate EVA. It causes overrating value of public corporation and making a wrong evaluation to public corporation in our country. 4. There is difference in market validity between our country and foreign country. But it' s not as large as we imagined. 5. Enhancing accountant adjustments to relevant companies is an approach that improves more validity of EVA in our country.