I have in my notes MVA = NPV
But also MVA = market value of the company - accounting book value of total capital
Can anyone explain the the difference?
You are going have to elaborate on your notes, MVA is equal to NPV of WHAT?
It makes sense if you mean that MVA = PV of EVA. I.e the MVA is the present value of all future expected economic value added.
Just had a deeper look, and yes it is NPV of EVA.
I don’t quite get the relationship but my brain isnt working properly after 6 hours of studying today.
I know how to calculate MVA both ways so I guess it would just be a case of using the relevant figures… right?