Homework Answers
EVA =After tax income - (WACC*capital employed)
EVA =2500000-(12.16%*10000000)
EVA =1,284,000
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12. A corporation has issued stock. If the after-tax income 12.16%, the EVA is: a $1,248,000...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating income last year of $1,195,000. Three sources of financing were used by the company: $2 million of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 percent interest, and $10 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating inco...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating income last year of $1,196,500. Three sources of financing were used by the company: $1 million of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 percent interest, and $11 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $185,000 after...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $185,000 after income taxes. Capital employed equaled $2.3 million. Brewster is 40 percent equity and 60 percent 10-year bonds paying 7 percent interest. Brewster's marginal tax rate is 40 percent. The company is consi dered a fairly risky investment and probably commands a 12-point premium above the 5 percent rate on long-term Treasury bonds. Jonathan Brewster's aunts, Abby and Martha, have just retired, and Brewster is...
Tgnacio, Inc, had after-tax operating income last year of $1,198,000. Three souroes of finanoing ...
Tgnacio, Inc, had after-tax operating income last year of $1,198,000. Three souroes of finanoing were used by the company: $2 milion of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 peroent interest, and $11 million in common stock, which was onsidered to be relatively risky (with a risk premium of 8 percent). The rate on long-term trensuries is 3 percent. Ignacio, Inc, pays a marginal tax rate of 30 percent Required: 1. Calculate the after-tax...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $194,000 after...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $194,000 after income taxes. Capital employed equaled $2.6 million. Brewster is 40 percent equity and 60 percent 10-year bonds paying 7 percent interest. Brewster's marginal tax rate is 40 percent. The company is considered a fairly risky investment and probably commands a 13-point premium above the 5 percent rate on long-term Treasury bonds. Jonathan Brewster's aunts, Abby and Martha, have just retired, and Brewster is the...
17. Casey Motors recently reported the following information: • Net income - $600,000. • Tax rate=40%...
17. Casey Motors recently reported the following information: • Net income - $600,000. • Tax rate=40% • Interest expense - $200,000 • Total investor-supplied operating capital employed 59 million • After-tax cost of capital (or WACC) -10% 1 What is the company's EVA? (Hint: Compute ERT; use that to find EBIT; use thar to find NOPAT, and finally find EVA). a. $200,000 b. SO c. -S180,000 d. -$300,000 Hayes corporation has $300 million of common equity and 6 million shares...
Tgnacio, Inc, had after-tax operating income last year of $1,198,000. Three souroes of finanoing were used...
Tgnacio, Inc, had after-tax operating income last year of $1,198,000. Three souroes of finanoing were used by the company: $2 milion of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 peroent interest, and $11 million in common stock, which was onsidered to be relatively risky (with a risk premium of 8 percent). The rate on long-term trensuries is 3 percent. Ignacio, Inc, pays a marginal tax rate of 30 percent Required: 1. Calculate the after-tax...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $194,000 after...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $194,000 after income taxes. Capital employed equaled $2.6 million. Brewster is 40 percent equity and 60 percent 10-year bonds paying 7 percent interest. Brewster’s marginal tax rate is 40 percent. The company is considered a fairly risky investment and probably commands a 13-point premium above the 5 percent rate on long-term Treasury bonds. Jonathan Brewster’s aunts, Abby and Martha, have just retired, and Brewster is the...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $186,000 after...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $186,000 after income taxes. Capital employed equaled $2.9 million. Brewster is 45 percent equity and 55 percent 10-year bonds paying 7 percent interest. Brewster’s marginal tax rate is 40 percent. The company is considered a fairly risky investment and probably commands a 13-point premium above the 5 percent rate on long-term Treasury bonds. Jonathan Brewster’s aunts, Abby and Martha, have just retired, and Brewster is the...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $187,000 after...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $187,000 after income taxes. Capital employed equaled $2.5 million. Brewster is 40 percent equity and 60 percent 10-year bonds paying 6 percent interest. Brewster’s marginal tax rate is 40 percent. The company is considered a fairly risky investment and probably commands a 13-point premium above the 5 percent rate on long-term Treasury bonds. Jonathan Brewster’s aunts, Abby and Martha, have just retired, and Brewster is the...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating income last year of $1,196,500. Three sources of financing were used by the company: $1 million of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 percent interest, and $11 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $185,000 after income taxes. Capital employed equaled $2.3 million. Brewster is 40 percent equity and 60 percent 10-year bonds paying 7 percent interest. Brewster's marginal tax rate is 40 percent. The company is consi dered a fairly risky investment and probably commands a 12-point premium above the 5 percent rate on long-term Treasury bonds. Jonathan Brewster's aunts, Abby and Martha, have just retired, and Brewster is...
Tgnacio, Inc, had after-tax operating income last year of $1,198,000. Three souroes of finanoing were used by the company: $2 milion of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 peroent interest, and $11 million in common stock, which was onsidered to be relatively risky (with a risk premium of 8 percent). The rate on long-term trensuries is 3 percent. Ignacio, Inc, pays a marginal tax rate of 30 percent Required: 1. Calculate the after-tax...
Calculating EVA Brewster Company manufactures elderberry wine. Last year, Brewster earned operating income of $194,000 after income taxes. Capital employed equaled $2.6 million. Brewster is 40 percent equity and 60 percent 10-year bonds paying 7 percent interest. Brewster's marginal tax rate is 40 percent. The company is considered a fairly risky investment and probably commands a 13-point premium above the 5 percent rate on long-term Treasury bonds. Jonathan Brewster's aunts, Abby and Martha, have just retired, and Brewster is the...
17. Casey Motors recently reported the following information: • Net income - $600,000. • Tax rate=40% • Interest expense - $200,000 • Total investor-supplied operating capital employed 59 million • After-tax cost of capital (or WACC) -10% 1 What is the company's EVA? (Hint: Compute ERT; use that to find EBIT; use thar to find NOPAT, and finally find EVA). a. $200,000 b. SO c. -S180,000 d. -$300,000 Hayes corporation has $300 million of common equity and 6 million shares...
Tgnacio, Inc, had after-tax operating income last year of $1,198,000. Three souroes of finanoing were used by the company: $2 milion of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 peroent interest, and $11 million in common stock, which was onsidered to be relatively risky (with a risk premium of 8 percent). The rate on long-term trensuries is 3 percent. Ignacio, Inc, pays a marginal tax rate of 30 percent Required: 1. Calculate the after-tax...
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