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
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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
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