a. What would happen to Air Canada's economic value added its cost of equity were 8% rather

Question:

a. What would happen to Air Canada's economic value added its were 8% rather than the 6.7% value we assumed?
b. Would this have any impact on its accounting profits?
c. Which do you think is a better measure of the firm's performance?
Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...