Macro Trends in Capital Productivity
The Value-Creation of Capital This post covers macro trends of capital productivity, the cost of capital, and value-creation of capital. In my thesis I discuss the relevance of value-creation of capital in the context of investment. Value-Creation, or Economic Value Added (EVA), is defined as Return on Invested Capital (ROIC) in excess of the Cost…
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The Value-Creation Pricing Factor
Value-Creation Central to the thesis is the topic of ‘value-creation’. Value-Creation, or Economic Value Added (EVA), is defined as Return On Invested Capital (ROIC) in excess of the Cost of Capital (WACC) multiplied by the Invested Capital. The findings show that historically speaking investors tend to assign a significant premium towards firms that create value…
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