Which of the following transactions will result in an increase in economic value added?
A) The acquisition of a new building in exchange for common stock
B) An increase in the weighted average cost of capital
C) Using cash to pay a long-term liability
D) Issuing long-term bonds payable in exchange for cash

Question

Quizplus · Accepted Answer

Paying off a long-term liability reduces the company's debt, potentially lowering interest expenses and increasing net operating profit after taxes, which can increase economic value added.

Which of the Following Transactions Will Result in an Increase