Author Question: Coldbrook Company has two sources of funds: long-term debt with a market and book value of ... (Read 46 times)

kodithompson · **on:** Mar 6, 2021

Coldbrook Company has two sources of funds: long-term debt with a market and book value of $17,000,000 issued at an interest rate of 11%, and equity capital that has a market value of $3,000,000 (book value of $4,000,000). Coldbrook Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 15%, while the tax rate is 35%.

	Operating Income	Assets	Current Liabilities
Bish Bash Falls	$816,000	$4,000,000	$830,000
Brooksville	$1,100,000	$5,000,000	$1,200,000
Stonybrook	$2,450,000	$9,250,000	$3,180,000

What is the EVA® for Bish Bash Falls? (Round intermediary calculations to four decimal places.)
◦ $530,400
◦ $264,061
◦ $266,339
◦ $159,638

medine · **Reply #1 on:** Mar 6, 2021

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