Maple Leaf Industries, headquartered in Toronto, is a multiproduct company with three divisions: Pacific Division, Plains Division, and Atlantic Division. The company has two sources of long-term capital: debt and equity. The interest rate on Maple Leafs $400 million debt is 9 percent, and the companys tax rate is 30 percent. The cost of Maple Leafs equity capital is 12 percent. Moreover, the market value of the companys equity is $600 million. (The book value of Maple Leafs equity is $440 million, but that amount does not reflect the current value of the companys assets or the value of intangible assets.)

The following data (in millions) pertains to Maple Leafs three divisions.

Division

Before-Tax Operating Income

Current Liabilities

Total Assets

Pacific

$

15

$

6

$

75

Plains

40

5

280

Atlantic

43

9

495

Required:

1.

Compute Maple Leaf's weighted-average cost of capital (WACC). (Do not round intermediate calculations. Round your final answer to 2 decimal places (i.e., .1234 should be entered as 12.34).)

Weighted-average cost of capital

%

2.	Compute the economic value added (or EVA) for each of the company's three divisions. (Do not round intermediate calculations. Enter your final answers in dollars and not millions.)

Division	Economic Value Added
Pacific
Plains
Atlantic