Here are data on two firms: Equity ($ million) Debt ($ million) ROC (%) Cost of Capital
Question:
Here are data on two firms: Equity ($ million) Debt ($ million) ROC (%) Cost of Capital (%)
Acme 140 100 18 8
Apex 450 150 16 9
a-1. Calculate the economic value added? (Do not round intermediate calculations. Enter your answers in millions)
a-2. Which firm has the higher economic value added? Acme has higher economic value added Apex has higher economic value added
b-1. Calculate the economic value added per dollar of invested capital? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b-2. Which has higher economic value added per dollar of invested capital? Acme has higher economic value added per dollar of invested capital Apex has higher economic value added per dollar of invested capital
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty