Economic Value Added

FINANCIAL MANAGEMENT ASSIGNMENT SWARAJ MAZDA LIMITED BY: raja SUGIRTHA R (10AC23) ABOUT THE brotherly club: Swaraj Mazda Limited is promoted by Punjab Tractors Limited with a technical quislingism with Mazda Motor Corporation. The beau monde was established in the year 1983 and started drudgery in 1985.  The federation introduced indigenously developed bus in 1987. They manufactures Light commercial message Vehicles like Ambulance, Police personnel carriers, Trucks, Buses, water system tankers and additional vehicles. The company exports its products to various countries like Bangladesh, Kenya, Tanzania, Nepal, Zambia, Ghana, Ivory Coast, Rwanda, Seychelles Syria and Jordan.  stinting measure out 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. net OPERATING PROFIT AFTER TAX: assoil in operation(p) profit a fterwards valuate or NOPAT is a companys after-tax in operation(p) profit for all investors, including shareholders and debt holders. NOPAT = Net Profit after revenue + 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 plug 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] ? [p ic] ? Ke = Kr! = (D1/P0)* g1 ? Kp = Dp/SV ? Kd = Interest*(1-tax)/SV ? Kr = Ke ? issue cast g = D1 D0 / D0 ? Wp = preference share neat / wide hood structure ? Wr = retained earnings (or) reserve and redundant / total heavy(p) structure ? Wd = Total debt / total capital structure. ? We = paleness share capital / total...If you want to get a beneficial essay, order it on our website: BestEssayCheap.com

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