Stonex Corp,whose Tax Rate Is 35%,has Two Sources of Funds

Multiple Choice

Stonex Corp,whose tax rate is 35%,has two sources of funds: long-term debt with a market value of $6,200,000 and an interest rate of 9%,and equity capital with a market value of $14,000,000 and a cost of equity of 13%.Stonex has two operating divisions,the Blue division and the Gold division,with the following financial measures for the current year:

Calculate EVA for the Gold Division.(Round intermediary calculations to four decimal places. )

A) -$56,290
B) $56,290
C) $1,040,000
D) $983,710