What is the company economic value added

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Reference no: EM132640683

The following year-end data pertain to ADAN Corporation:

Book Value Fair Value

Current Assets P 800,000

Non-current assets P3,200,000

Current Liabilities P 400,000

Non-current liabilities (8% interest rate) P1,000,000 P1,000,000

Stockholders' Equity P2,600,000 P3,000,000

During the year, the company earned income before the interest and taxes of P800,000. It pays tax at the rate of 25%. Its cost of equity capital is 12%.

Required:

Problem 1: What is the company's economic value added?

Reference no: EM132640683

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