Compute the company economic value added

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1. Tech Temps has an issue of preffered stock outstanding that pays stockholders a dividend equal to $10 each year. If the appropiate required rate of return for this stock is 8%, what is its market value?

2. Tech temps financial statements shhow the following information:

average cost of funds 10.0%
EBIT $500,000
Total capital $1,250,000
EPS $2.00
Shares outstanding 150,000
Marginal tax rate 30.0%

1. Compute the company's economic value added (EVA)

3. Suppose that normally Tech Temps' P/E ratio is 20x. Using the information giving previously, estimate.

Reference no: EM132653092

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