question 5

Waldorf Company has two sources of funds: long-term debt with a market and book value of $9 million issued at an interest rate of 10%, and equity capital that has a market value of $6 million (book value of $2 million). The cost of equity capital is 5%, while the tax rate is 30%. What is the EVA for St. johns?

	before tax Operating Income	Assets	Current Liabilities
ottawa	$ 480000	$ 2000,000	$ 100,000
st johns	$600000	$ 4,000,000	$ 300,000
regina	$1020000	$6000000	$600000

what is EVA for ST. Johns ?

1-$190600

2-$145000

3-$310600

4-$142200

5-$200000