Young Company has a tax rate of 40 percent. Information for the company is as follows:
$$\begin{array} { l r r }
& \text { Amount } & \text { After-Tax Cost } \
\text { Mortgage bonds } & \$ 1,000,000 & 0.048 \
\text { Unsecured bonds } & 3,000,000 & 0.050 \
\text { Comman stock } & 6,000,000 & 0.150
\end{array}$$
-Refer to the figure.What is the EVA if the before-tax operating income is $1,500,000?

Question

Young Company has a tax rate of 40 percent. Information for the company is as follows:
$$\begin{array} { l r r } 
& \text { Amount } & \text { After-Tax Cost } \
\text { Mortgage bonds } & \$ 1,000,000 & 0.048 \
\text { Unsecured bonds } & 3,000,000 & 0.050 \
\text { Comman stock } & 6,000,000 & 0.150
\end{array}$$
-Refer to the figure.What is the EVA if the before-tax operating income is $1,500,000?

Quizplus · Accepted Answer

The Answer of Young Company has a tax rate of 40 percent. Information for the company is as follows:
$$\begin{array} { l r r } 
& \text { Amount } & \text { After-Tax Cost } \
\text { Mortgage bonds } & \$ 1,000,000 & 0.048 \
\text { Unsecured bonds } & 3,000,000 & 0.050 \
\text { Comman stock } & 6,000,000 & 0.150
\end{array}$$
-Refer to the figure.What is the EVA if the before-tax operating income is $1,500,000?

Young Company Has a Tax Rate of 40 Percent -Refer to the Figure