State Holding, Capital Cost And Eva Appraisal

In order to protect the state-owned assets, prevent the loss of assets, makeenterprise management more effective，Our country executes years of state-ownedenterprises reform.There are many index to measure enterprise performance,but noneof them consider the cost of equity capital. With the birth of EVA, it is necessary touse EVA as a index to measure enterprise performance. Our country has used EVA inthe past few years. EVA is Economic Value Added. It considers the cost of equitycapital and cost of debt. EVA can accurately measure the ability of value creation.EVA is equal to net operating profit after tax subtract weighted average cost of capital.This article searches the literature from the Capital structure and corporateperformance. Review the capital cost estimation method and EVA theory research. Onthe basic of capital cost and EVA theory. This article link State holding, the cost ofcapital and EVA by using descriptive statistical method. This paper selects all the Ashares of listed companies as sample(except financial industry). Classify the Sampleaccording to shareholding ratio:25%-45%,above45%.Analysis the cost of capital,state ownership and EVA of the four kinds of sample enterprises.According to the results, we draw the conclusion that State holding proportionhas a certain impact on EVA. EVA decreases when State holding proportion is below45%, and then increases as State holding proportion is above45%. So We say stateholding proportion is positive for EVA in a certain range.It is positive for businessmanagement.