Anahara Co. reported these data at year-end: Pre-tax operating income Current assets Long-term assets Current liabilities...
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Anahara Co. reported these data at year-end: Pre-tax operating income Current assets Long-term assets Current liabilities Long-term liabilities $ 4.000.000 4.000.000 16.000.000 2.000.000 5.000.000 The long-term debt has an interest rate of 8%, and its value equaled its book value at year- end. The fair value of the equity capital is $2 million greater than its book value. Anahara's tax rate is 25% and its cost of equity capital is 10%. Required: 1. Please calculate the weighted-average cost of capital (WACC) to be used in the economic value added (EVA) calculation. 2. Please calculate the economic value added (EVA) for this year. Anahara Co. reported these data at year-end: Pre-tax operating income Current assets Long-term assets Current liabilities Long-term liabilities $ 4.000.000 4.000.000 16.000.000 2.000.000 5.000.000 The long-term debt has an interest rate of 8%, and its value equaled its book value at year- end. The fair value of the equity capital is $2 million greater than its book value. Anahara's tax rate is 25% and its cost of equity capital is 10%. Required: 1. Please calculate the weighted-average cost of capital (WACC) to be used in the economic value added (EVA) calculation. 2. Please calculate the economic value added (EVA) for this year.
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