EVA And Its Information Content

The stock market of China is at the emerging adding transiting stage. There exists a lot of problems, such as the unreasonableness of the market structure, the substandard of information disclosure of listed companies as well as the weak market supervision , on the market, which directly and indirectly jeopardizes the interests of investors, especially those of the medium and small investors. Then, in order to guide investors to make reasonable and effective decisions, scholars have launched a large amount of research around the dependence between a series of financial dada of listed companies and their stock prices, such as some tradi tional business measurement indexes' explain degree to the stock price. The purpose of the research is to identify that these indexes are of some information content. While, forefathers' theory and positive research showed that these traditional indexes still have many defects, which may mislead investors' decision. In such cases, EVA(Economic Value Added) arised and it had become an important supplement to the traditional evaluation indexes.The index EVA has been widely used on the mature foreign market and is of strong effectiveness, while, under the immature and imperfect market environment of China, to what degree can EVA delineate the stock price and how much information content is EVA of? These problems areexactly worth being studied. In view of these, on the bases of studying some correlated theory and positive research made by forefathers, this paper makes a rough positive research about the dependence between listed companies and their stock price in the same period. Besides, in order to identify and compare the study result better, the indexes of EPS and the operate net cash flow per share are also studied in this positive study. Thus, through the way of normative approach combining with positive study, this paper attempts to further identify EVA' s information content in China' s market, reveal some problems existing in the stock market of china today and put forward some countermeasure and suggestion against them. The purpose is to attempt to widen investors' investment thinking, guide them-to make wise decision, alleviate some contradiction existing in China' s market and inquire after a rationalized road for its future sound development.