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Basic Question 1 of 5
Based on the following information, calculate ABC Company's residual income using equity charge method:
- At the beginning of the fiscal period: debt - $150; equity - $250.
- Net income of the period: $50.
- Cost of equity: 15%.
- Cost of debt: 6%.
- Marginal tax rate: 35%.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
calculate and interpret residual income, economic value added, and market value added;
CFA® 2024 Level II Curriculum, Volume 4, Module 26.