Tech Star Ltd is evaluating its CEO's performance last year.The net income earned is 1.2 million.The company invested in three projects worth 4 million,2 million and 8 million respectively.The risk free rate is 1%.Market beta is estimated at 1.2 and the market risk premiumis 5%.The company has no debt financing.What is the CEO's economic value added(EVA)? A.0.220 million B.0.388 million C.None of the choices D.The CEO has 0 economic value added
Tech Star Ltd is evaluating its CEO's performance last year.The net income earned is 1.2 million.The company invested in three projects worth 4 million,2 million and 8 million respectively.The risk free rate is 1%.Market beta is estimated at 1.2 and the market risk premiumis 5%.The company has no debt financing.What is the CEO's economic value added(EVA)? A.0.220 million B.0.388 million C.None of the choices D.The CEO has 0 economic value added
Chapter14: Capital Structure Management In Practice
Section: Chapter Questions
Problem 21P
Related questions
Question
Tech Star Ltd is evaluating its CEO's performance last year.The net income earned is 1.2 million.The company invested in three projects worth 4 million,2 million and 8 million respectively.The risk free rate is 1%.Market beta is estimated at 1.2 and the market risk premiumis 5%.The company has no debt financing.What is the CEO's economic value added(EVA)?
A.0.220 million
B.0.388 million
C.None of the choices
D.The CEO has 0 economic value added
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning