This paper responds to the article by Biddle, Bowen, and Wallace (BBW) by suggesting that their study of EVA and earnings has three potential shortcomings: 1999 Morgan Stanley.

type="main" <p>During the 19th century and the first half of the 20th, the compensation of non-founder managers of U.S. public companies was guided by partnership concepts. Andrew Carnegie made his senior staff coowners by selling them stock at book value. And Alfred Sloan gave the senior staff of...</p>

Despite the wide acceptance of DCF valuation and its corollary that value is created only by earning more than the cost of capital, very few companies use performance measures that focus on corporate efficiency in using capital-measures such as return on capital (ROC) or economic value added...