Problem:
EBITDA $120 million
Depreciation expensive $20 million
Net Income $7 million
Capital Investment $300 million
Book value of equity capital $200 million
No. of shares of common stock outstanding $5 million
Tax rate $40 percent
Cost of Capital $10 percent
Market price per share of common stock $ 30
a) Determine Lakes's EVA
b) Determine Lake's MVA
c) Explain the difference between EVA and MVA.