Gpd corporation has operating income (ebit) of $300,000, total assets of $1,500,000, and its capital structure consists of 40% debt and 60% common equity. total assets equal total invested capital. the firm’s after-tax cost of capital is 10.5% and its tax rate is 40%. the firm has 50,000 shares of common stock currently outstanding and the current price of a share of common stock is $27.00. what is the firm’s economic value added (eva)?

$22,500

Explanation:

First step is to calculate the net income which shall be calculated using the following formula:

EBIT                                          $300,00

taxes(300,000*40%)              ($120,000)

Net income                             $180,000

Now we have to calculate the EVA which can be determined using the below mentioned formula:

EVA=Net income- (invested capital*cost of capital)

      =180,000-(1,500,000*10.5%)

      =$22,500

advanced placement tests

start by isolating the variable on one side by adding 43w^2 to both sides.   the equation will read:

25w^2+5=0

*subtract 5 from both sides*

25w^2=-5

*divide both sides by 25*

w^2=-1/5

*take the square root of both sides*

w=√(-1/5)

the square root of -1 is i.   the square root of 5 remains √5

the answer is i/√5.

hope this