Author Question: Waldorf Company has two sources of funds: long-term debt with a market and book value of $5,400,000 ... (Read 80 times)

deesands · **on:** Mar 6, 2021

Waldorf Company has two sources of funds: long-term debt with a market and book value of $5,400,000 issued at an interest rate of 12%, and equity capital that has a market value of $4,300,000 (book value of $2,100,000). Waldorf Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 12%, while the tax rate is 35%.

	Operating Income	Assets	Current Liabilities
St. Louis	$480,000	$2,000,000	$100,000
Cedar Rapids	$600,000	$4,000,000	$300,000
Wichita	$1,500,000	$6,400,000	$800,000

What is the EVA® for Wichita? (Round intermediary calculations to four decimal places.)
◦ $975,000
◦ $959,040
◦ $434,040
◦ $356,760

kbennett34 · **Reply #1 on:** Mar 6, 2021

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