Question
GPD Corporation has operating income (EBIT) of $300,000, total assets of $1,500,000, and its capital structure consists of 40 percent debt and 60 percent equity.
GPD Corporation has operating income (EBIT) of $300,000, total assets of $1,500,000, and its capital structure consists of 40 percent debt and 60 percent equity. Total assets were equal to total operating capital. The firm's after-tax cost of capital is 11 percent and its tax rate is 40 percent. The firm has 50,000 shares of common stock currently outstanding and the current price of a share of stock is $30.00.
What is the firm's Economic Value Added (EVA)?
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Solution Economic Value Added EVA is a measure of a companys financial performance based on the r...
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
11th edition
324422870, 324422873, 978-0324302691
