The Relationship between Refined Economic Value Added (REVA) and Risk - Adjusted Stock Return

Financial experts in the response to critics of EVA, propose the refined form of EVA that focuses on relevance of information versus its reliability. In other word's this measure that we call it "REVA", computes the opportunity cost of used resources in the base of their market values. In this research we studied information content and explanatory power of REVA for different measures of risk-adjusted stock return. The hypothesis of this study was tested for 50 active corporations introduced in the research period. We used the available statistical society of corporations accepted in Tehran stock exchange, and tested the Correlation degree between variables of the research and the explanatory power of REVA for the changes of different measures for risk-adjusted stock return. The results of this study indicate that, there is a weak positive correlation between REV A and measures of risk-adjusted stock return, and a (differential or abnormal return)' REV A (total risk-adjusted stock return), and RVOL (systematic risk-adjusted stock return) orderly have the greatest correlation coefficient with REV A. It means: rREVA,α > rREVA,RVAR > rREVA,RVOL