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Required information [The following information applies to the questions displayed below.] All-Canadian, Ltd. is a multiproduct company with three divisions: Pacific Division, Plains Division, and
Required information [The following information applies to the questions displayed below.] All-Canadian, Ltd. 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 All Canadian's $418 million debt is 9 percent, and the company's tax rate is 30 percent. The cost of All- Canadian's equity capital is 10 percent. Moreover, the market value of the company's equity is $627 million. The book value of All-Canadian's equity is $442 million, but that amount does not reflect the current value of the company's assets or the value of intangible assets.) The following data (in millions) pertain to All-Canadian's three divisions Before-Tax Operating Income $12 4 2 45 Total Assets $ 68 318 498 Current Liabilities Division Pacific Plains Atlantic 10
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