Economic Value Added

FINANCIAL MANAGEMENT ASSIGNMENT SWARAJ MAZDA LIMITED BY: genus Raja SUGIRTHA R (10AC23) ABOUT THE societal club: Swaraj Mazda Limited is promoted by Punjab Tractors Limited with a technical quislingism with Mazda Motor Corporation. The familiarity was established in the year 1983 and started drudgery in 1985.  The federation introduced indigenously developed bus in 1987. They manufactures Light commercial-grade Vehicles like Ambulance, Police personnel carriers, Trucks, Buses, water system tankers and special(prenominal) vehicles. The company exports its products to various countries like Bangladesh, Kenya, Tanzania, Nepal, Zambia, Ghana, Ivory Coast, Rwanda, Seychelles Syria and Jordan.  stinting note value ADDITION: Economic Value Added or EVA is an fancy of a firms the esteem created in excess of the required regaining of the companys shareholders. shed light on OPERATING PROFIT AFTER TAX: assoil dire ct profit afterwards valuate or NOPAT is a companys after-tax operating(a) profit for all investors, including shareholders and debt holders. NOPAT = Net Profit after tax income + after tax Interest Expense after tax Interest Income When NOPAT > Cost of funds raised then, value is created by the organisation. It is referred as positive EVA. COST OF CAPITAL The cost of stop up or funds is The shareholders required return on a portfolio of all the companys existing securities.

Cost of funds = Capital social system [pic]Ko ? [pic] ? [pic] ? [pic] ? [pic] ? [pic] ? Ke = Kr = (D1/P0)*! g1 ? Kp = Dp/SV ? Kd = Interest*(1-tax)/SV ? Kr = Ke ? branch cast g = D1 D0 / D0 ? Wp = preference share neat / issue forth hood structure ? Wr = retained earnings (or) reserve and wasted / total heavy(p) structure ? Wd = Total debt / total capital structure. ? We = law share capital / total...If you want to get a estimable essay, order it on our website: BestEssayCheap.com

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