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2. Your company has the debt-to-equity breakdown below. The after-tax cost of the debt is 4% and the cost of the equity is 11%. Cost
2. Your company has the debt-to-equity breakdown below. The after-tax cost of the debt is 4% and the cost of the equity is 11%. Cost of Capital Proportion of Total Assets Equity 11% 50% Debt 4% 50% a. What is your company's Weighted Average Cost of Capital (WACC)? b. Your company's 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? c. Is the Recruiting Division adding to the economic value of this company
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