Coldbrook Company Has Two Sources of Funds: Long-Term Debt with a Market

question 142

Multiple Choice

Coldbrook Company has two sources of funds: long-term debt with a market and book value of $17,000,000 issued at an interest rate of 11%, and equity capital that has a market value of $6,000,000 (book value of $5,500,000) . Coldbrook Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 15%, while the tax rate is 35%.

What is the EVA® for Stonybrook? (Round intermediary calculations to four decimal places.)

• A) $1,184,600
• B) $1,755,000
• C) $570,400
• D) $658,693

---

Definitions:

Issue(s)

Matters of concern or debate that require consideration or resolution, often raised within a specific context or environment.

Affect

A psychological term referring to the observable expression of emotion or feelings which can change depending on the social situation.

Mood

A temporary state of feeling or emotion that can influence an individual's perception and behavior.

Emotional Well-being

A state of positive psychological functioning that encompasses feelings of happiness, satisfaction with life, and the absence of negative emotions such as depression and anxiety.