Shareholder Value Added (SVA)

Shareholder Value Added (SVA)

Intuition Publishing
Updated Sep 24, 2020

Shareholder value added is the difference between the wealth held by shareholders at the end of a given financial period and the wealth they held at the beginning of the period. Capital gains and payments to shareholders (such as dividends) increase shareholder wealth, while outlays by shareholders reduce it. Here we explore how SVA is calculated, how it is related to shareholder return, and how shareholder return must exceed the cost of equity for value to be created for shareholders.