What was the firm economic value added

Assignment Help Financial Management
Reference no: EM131583565

For 2011, Everyday Electronics reported $22.5 million of sales and $18 million of operating costs (including depreciation). The company has $15 million of investor-supplied operating capital. Its weighted average cost of capital is 10% and its federal-plus-state income tax rate was 36%. What was the firm's Economic Value Added (EVA), that is, how much value did management add to stockholders' wealth during 2011? Round your answer to the nearest dollar, if necessary.

Write out your answer completely. For example, 13 million should be entered as 13,000,000.

Reference no: EM131583565

Questions Cloud

What is the default risk premium on corporate bonds : A company's 5-year bonds are yielding 9.6% per year. what is the default risk premium on the corporate bonds?
Complex financial problem that requires several skills : This problem is a complex financial problem that requires several skills, perhaps some from previous sections. What is the loan balance after the grace period?
Yield on security with no maturity-default or liquidity risk : what is the yield on a 4-year security with no maturity, default, or liquidity risk
What is the default risk premium on corporate bond : What is the default risk premium on the corporate bond?
What was the firm economic value added : What was the firm's Economic Value Added (EVA), that is, how much value did management add to stockholders' wealth during 2011?
Annual percentage rate and effective annual interest rate : Explain the difference between APR (Annual Percentage Rate) and the Effective Annual Interest rate (EAR)?
Finances its assets with debt : Jay Lo Enterprises finances its assets with 60 percent debt, 10 percent preferred stock, and 30 percent common stock.
Calculate the net cash flow to the payables hedge : Calculate the net cash flow to the payables hedge.
Explain the large increase in dividends : What was the 2011 free cash flow? How would you explain the large increase in 2011 dividends?

Reviews

Write a Review

Financial Management Questions & Answers

  Financial analysis for managers - oman cables industry

Prepare comparative income statements and balance sheet for years using Horizontal and Vertical Analysis techniques for the both income statements and balance sheet.

  Calculate at what price the bonds are issued

Assuming the market rate of interest is 4 percent, calculate at what price the bonds are issued.- Assuming the market rate of interest is 8 percent, calculate at what price the bonds are issued.

  What is the current bond price

Lycan, Inc., has 6 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 8 percent, what is the current bond price?

  Find the annual financing cost of forgoing the cash discount

Determine the annual financing cost of forgoing the cash discount if the credit terms are "1/10, net 30" and the invoice is not paid until it is 20 days past due.

  What is your net profit or loss on this investment

You sold five put contracts on CTB stock at an option price per share of $1.90. The options have an exercise price of $45 per share. The options were exercised today when the market price was $39 a share. What is your net profit or loss on this inves..

  Company would call its outstanding bonds at this time

Which of the following factors would increase the likelihood that a company would call its outstanding bonds at this time?

  Fairly compensated for the risk of the firm

The risk free rate is 7%, the return in the market is 10%, and the beta is 1.30. What return must you receive to be satisfied that you are being fairly compensated for the risk of the firm?

  Compare the operating leverage for the entire 2007 2009

Compare the operating leverage for the entire 2007-2009 period to the values found for the 2007-2008 and 2008-2009 periods and explain the differences.

  Narrowed the decision down to two potential targets

TCG plans to acquire a sports media company. TCG has narrowed the decision down to two potential targets. Assuming that the acquisition is a mutually exlusive project, which decision rule enables TCG to rank the companies and choose the best one?

  What is the mean standard deviation frontier

What is the mean–standard deviation frontier, and what is the mean-variance-efficient (MVE) portfolio?

  Business will be worthless

Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $9,953, $6,030, and $13,798 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determ..

  Provide your plan or goal in table

Provide your plan or goal in table form for each company that you want to invest. Your plan must indicate how many shares you want to buy for the start and provide your reasons

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd