1. Your company has a debt to equity breakdown of 50% debt and 50% equity. The cost of the debt is 7% and the cost of the equity is 14%. What is your companys Weighted Average Cost of Capital (WACC)?

A) 2.9%

B) 10.5%

C) 12.7%

D) 14.0%

2. Your companys Human Resources Information Systems Division has $3,000,000 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 Human Resources is $770,000. What is the Economic Value Added (EVA) for the Human Resources Information Systems (HRIS) Division? Your company's WACC is 10.5%, and this division is an average-risk investment.

A) $301,000.

B) $3,200,000.

C) $752,000.

D) 275,500.

3. Weighted Average Cost of Capital is the same percentage for all companies.

True

False