b. Within your company above, the Recruiting Division has $1,200,000 in total assets, which is the...
b. Within your company above, the Recruiting Division has $1,200,000 in total assets, which is the total capital employed by this division. The tax rate is 20% and the Earnings Before Interest and Tax (EBIT) of Recruiting is $100,000. What is the Economic Value Added (EVA) for the Recruiting Division?
*FYI: Cost of Debt = 5.0% (1-.20) = 4.0%
Also the WACC is 7.5% from problem a.
PS. I need to know the steps for the answers for me to understand. Please, and thank you.
c. Is the Recruiting Division adding to the economic value of this company?
Homework Answers
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