Chartered Financial Analyst Level 2
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An analyst gathers the following data for a company:
-
Tax rate: 25%
-
Cost of debt before tax: 6%
-
Cost of equity: 10%
-
Debt financing: $4,000,000
-
Equity financing: $6,000,000
-
Net operating profit after tax: $750,000
The company's residual income is:
An analyst gathers the following data for a company:
-
Tax rate: 25%
-
Cost of debt before tax: 6%
-
Cost of equity: 10%
-
Debt financing:
$4,000,000 -
Equity financing:
$6,000,000 -
Net operating profit after tax:
$750,000
The company's residual income is:
Exam-Like
A
-$90,000
B
-$30,000
C
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