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Vikequeens Inc. has two sources of funds: long-term debt with a market and book value of $20 million issued at an interest rate of
Vikequeens Inc. has two sources of funds: long-term debt with a market and book value of $20 million issued at an interest rate of 6%, and equity capital that has a market value of $6 million (book value of $3 million). Vikequeens Inc. has profit centres in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 9%, while the tax rate is 28%. Operating Income Assets Current Liabilities Torontonian $815,000 $3,750,000 $800,000 Kuebac $1,100,000 $5,000,000 $1,200,000 Loosebrick $2,450,000 $9,250,000 $3,180,000 8. What is the for Torontnian? A) $338,563 B) $305,000 C) $275,500 D) $255,500 E) $220,188
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