Question

The following data pertain to Dana Industries: Interest rate on debt capital: 9% Cost of equity...

The following data pertain to Dana Industries:

Interest rate on debt capital: 9%
Cost of equity capital: 12%
Before-tax operating income: P35 million
Market value of debt capital: P60 million
Market value of equity capital: P120 million
Total assets: P150 million
Income tax rate: 30%
Total current liabilities: P15 million

Required:
Compute Dana’s weighted-average cost of capital.
Compute Dana’s economic value added.

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