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. Waldorf Company has two sources of funds: long-term debt with a market and book value of $5,200,000 issued at an interest rate of 13%,
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Waldorf Company has two sources of funds: long-term debt with a market and book value of $5,200,000 issued at an interest rate of 13%, and equity capital that has a market value of $4,200,000 (book value of $2,400,000). Waldorf Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 13%, while the tax rate is 35%. St. Louis Cedar Rapids Wichita Operating Income $480,000 $600,000 $1,020,000 Assets $2,600,000 $4,000,000 $6,000,000 Current Liabilities $110,000 $300,000 $600,000 What is the EVA for St. Louis? (Round intermediary calculations to four decimal places.) O A. $260,952 O B. $65,739 OC. $312,000 O D. $51,048Step by Step Solution
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