Olden Company has a tax rate of 40 percent. Information for the company is as follows:

	Amount	After-tax Cost
Mortgage bonds	$1,000,000	0.048
Unsecured bonds	3,000,000	0.050
Common stock	6,000,000	0.150

What is the weighted average cost of capital?

a. 0.2480

b. 0.1098

c. 0.0366

d. 0.0827

What is the EVA if the before-tax operating income is $1,500,000?

a. $1,134,000

b. $534,000

c. $(198,000)

d. $402,000