Scribd Logo
Upload

Welcome to Scribd!

  • 28 views

    Eva 20067

    Uploaded by

    Ranjith Sivasamy
    The document calculates the economic value added (EVA) for a company in 2007. It provides the calculations for net operating profit after tax (NOPAT), cost of funds, and cost of capital rates for equity, preference shares, debt, and retained earnings. It then uses these figures to calculate the cost of funds and EVA for the year as Rs. 0.904.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd

    Eva 20067

    Uploaded by

    Ranjith Sivasamy
    28 views2 pages
    The document calculates the economic value added (EVA) for a company in 2007. It provides the calculations for net operating profit after tax (NOPAT), cost of funds, and cost of capital rates for equity, preference shares, debt, and retained earnings. It then uses these figures to calculate the cost of funds and EVA for the year as Rs. 0.904.

    Original Title

    EVA 20067

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document calculates the economic value added (EVA) for a company in 2007. It provides the calculations for net operating profit after tax (NOPAT), cost of funds, and cost of capital rates for equity, preference shares, debt, and retained earnings. It then uses these figures to calculate the cost of funds and EVA for the year as Rs. 0.904.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    28 views2 pages

    Eva 20067

    Uploaded by

    Ranjith Sivasamy
    The document calculates the economic value added (EVA) for a company in 2007. It provides the calculations for net operating profit after tax (NOPAT), cost of funds, and cost of capital rates for equity, preference shares, debt, and retained earnings. It then uses these figures to calculate the cost of funds and EVA for the year as Rs. 0.904.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    EVA for the year 2007

    NOPAT
    Economic Value Added ¿ cost of funds

    NOPAT = EAT + Interest

    Cost of funds = total capital ¿Cost of capital rate (C)

    Cost of capital rate K 0=W e K e +W p K p +W d K d +W r K r

    K e =cost of equity

    K p =cost of preference share

    K d =cost of debt

    K r =cost of retained earnings

    Equity 13.50
    W e= = =0.03 32
    total capital 406.5

    Debt 218.58
    W d= = =0.5 377
    total capital 406.5

    Preference share 0
    W p= = =0
    total capital 406.5

    reserves 174.42
    W r= = =0. 429
    total capital 406.5

    D0=¿.5

    D1=¿ .6

    p0=¿58.2

    FV =¿2.00

    D 1−D 0 .6−.5
    g= = =0 .2
    D0 .5
    D1 .6
    K e= + g= +0 .2=0. 2103
    p0 58.2

    D1 .6
    K p= = =0. 0027
    sv 218.58

    33.99
    12.65 (1− )
    I (1−t) 100
    Kd= = =0 . 038
    sv 218.58

    K r =K E=¿ 0.2103

    K 0=W e K e +W p K p +W d K d +W r K r

    =0.037*0.0083+0*0.5+0.545*1.104+0.335*0.0083

    = 0.1175
    Cost of funds=K 0∗C=¿0.1175*406.5

    =47.797
    NOPAT =EAT + Interest =¿61.34+16.73=43.22

    NOPAT 43.22
    EVA= = =0.904
    cost of funds 47.797

    You might also like