Two companies with different economic-value-added (EVA®) profiles are Emerson Company, Inc., and Farmers Bank Limited. Adapted versions of the two companies' financial statements are presented here (in millions):

Requirements
1. Before performing any calculations, which company do you think represents the better investment? Give your reason.
2. Compute the EVA® for each company, and then decide which company's stock you would rather hold as an investment. Assume that both companies' cost of capital is 9.5%.

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Emerson Farmers Company, Inc. Bank Limited Balance sheet data (beginning of year): Total asset.... Interest-bearing debt .. All other liabilities. Stockholders' equity. Total liabilities and equity. $13,590 1,2573 2,590 10,997 $13,590 $ 4,490 2,690 543 $ 4,490 Income statement data: Total revenu Interest expense. $10,447 79 3,819 $ 1,121