Kareem Construction Company has the following amounts of interest-bearing debt and common equity capital:

Kareem Construction is in the 30 percent average tax bracket.
A. Calculate the after-tax WACC for Kareem.
B. Determine the after-tax dollar cost of financial capital used by Kareem.
C. Kareem€™s EBIT was $300,000. Calculate Kareem€™s NOPAT.
D. Calculate Kareem€™s EVA. Did the venture build or destroyvalue?

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FINANCING SOURCE DOLLAR AMOUNT $200,000 $200,000 $600,000 INTERESTRATE 12% 14% COST OF CAPITAL Short-tem loan Long-term loan Equity capital 22%