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Assume that a firm's capital structure consists of $400,000 of debt at an after-tax cost of 6.0 percent, $300,000 of preferred at a cost of
Assume that a firm's capital structure consists of $400,000 of debt at an after-tax cost of 6.0 percent, $300,000 of preferred at a cost of 9.0 percent, and $1,300,000 of stock at a cost of 18.0 percent. Also assume that the firm has earnings before interest and taxes (EBIT) of $685,000 and a tax rate of 40.0 percent. Given this information, determine the rm's economic value added (EVA) for the year. A $ 96,000.00 B. $126,000.00 C. $156,000.00 D $186,000.00 E $216,000.00
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