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

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