26. Your company has the debt to equity breakdown below. The cost of debt is 4% (based on the interest on debt of 5% and the tax rate of 20%) and the cost of the equity is 8%.

	COST OF CAPITAL	PROPORTION OF TOTAL ASSETS
Equity	8%	.40
Debt	4% based on interest rate(1-t)	.60

A) What is your companys Weighted Average Cost of Capital (WACC)?

B) Your companys Recruiting Division has $2,100,000 in total assets, which is the total capital employed by this division. The Earnings Before Interest and Tax (EBIT) of the Recruiting Division is $477,000, and the tax rate is 20%. What is the Economic Value Added (EVA) for the Recruiting Division? C) Is the Recruiting Division adding to the economic value of this company?