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

question 118

Multiple Choice

Waldorf Company has two sources of funds: long-term debt with a market and book value of $5,200,000 issued at an interest rate of 13%,and equity capital that has a market value of $4,200,000 (book value of $2,400,000) .Waldorf Company has profit centers in the following locations with the following operating incomes,total assets,and current liabilities.The cost of equity capital is 13%,while the tax rate is 35%.

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

• A)$65,739
• B)$51,048
• C)$312,000
• D)$260,952

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Definitions:

Promotion

A marketing strategy involving the publicizing and selling of a product or service, often including discounts, advertising, and special offers to stimulate demand.

Marketing Mix

A set of actions, or tactics, that a company uses to promote its brand or product in the market; traditionally defined as the 4Ps: Product, Price, Place, and Promotion.

Easiest

Describes the least difficult or effort-requiring option, task, or approach among a set of alternatives.

Marketing

The process of promoting, selling, and distributing a product or service, including market research and advertising strategies.