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

question 150

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

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Definitions:

John Brown

An American abolitionist leader in the 19th century known for his militant opposition to slavery.

Harpers Ferry

A historic town in West Virginia, known for John Brown's raid in 1859, which was intended to initiate an armed slave revolt.

Abolitionists

Individuals and groups who advocated for the immediate end of slavery and the emancipation of slaves, active especially in the 19th century.

Executive Branch

is one of the three branches of government, tasked with enforcing laws passed by the legislature, headed by the President in the United States or similar leadership positions in other countries.