Stonex Corp, Whose Tax Rate Is 35%, Has Two Sources

question 9

Multiple Choice

Stonex Corp, whose tax rate is 35%, has two sources of funds: long-term debt with a market value of $6,200,000 and an interest rate of 9%, and equity capital with a market value of $14,000,000 and a cost of equity of 13%. Stonex has two operating divisions, the Blue division and the Gold division, with the following financial measures for the current year:

Calculate EVA for the Gold Division. (Round intermediary calculations to four decimal places.)

• A) -$56,290
• B) $56,290
• C) $1,040,000
• D) $983,710

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Definitions:

U-shaped Arrangement

A specific spatial organization where objects, cells, or structures form the shape of the letter "U", often found in anatomical structures or architectural designs.

Teeth

Hard, calcified structures in the mouths of many animals, including humans, used for biting, tearing, and grinding food.

Homo Erectus

An extinct species of humanoids that lived approximately 1.9 million to 110,000 years ago, known for upright posture and significant brain growth compared to earlier hominins.

Genus

A rank in the biological classification system, higher than species and below family, used to group species that share common characteristics.