Best writers. Best papers. Let professionals take care of your academic papers

Order a similar paper and get 15% discount on your first order with us
Use the following coupon "FIRST15"
ORDER NOW

Economic Value Added (EVA) for a firm

Question

I am trying to find the Economic Value Added (EVA) for a firm. The equation that I have is “EVA = Operating Income

– (Cost of Capital x Total Capitalization)”. The problem that I am having is with the Operating Income. “Operating Income = Net Income + After-tax Interest. I cannot figure out how to get the After-Tax Interest. The problem that I am trying to solve is as follows. 

At the end of 2011 Home Depot’s total capitalization amounted to $29,007 million. In 2012 debt investors received interest income of $640 million. Net income to shareholders was $4,511 million. (Assume a tax rate of 35%.)
Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"