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Stonex Corp, whose tax rate is 36%, has two sources of funds: long-term debt with a market value of $6,200,000 and an interest rate
Stonex Corp, whose tax rate is 36%, has two sources of funds: long-term debt with a market value of $6,200,000 and an interest rate of 9%, and equity capital with a market value of $14,000,000 and a cost of equity of 13%. Stonex has two operating divisions, the Blue division and the Gold division, with the following financial measures for the current year: Blue Div. Gold Div. Total Assets $9,500,000 $12,000,000 Current Liabilities $2,500,000 $2,700,000 Operating Income $1,155,000 $1,600,000 Calculate EVA for the Gold Division. (Round intermediary calculations to four decimal places.) A. $21,460 B. $1,002,540 c. $1,024,000 D. ($21,460)
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