Shareholder Value Added - SVA

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DEFINITION of 'Shareholder Value Added - SVA'

A value-based performance measure of a company's worth to shareholders. The basic calculation is net operating profit after tax (NOPAT) minus the cost of capital from the issuance of debt and equity, based on the company's weighted average cost of capital:

Shareholder Value Added (SVA)

INVESTOPEDIA EXPLAINS 'Shareholder Value Added - SVA'

Using the market value of the company, rather than the accounting-based value in the above calculation, will give the market value added to shareholders.

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