Samsco has current after-tax operating income of $65 million and a cost of capital of 9.5%....

  

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Samsco has current after-tax operating income of $65 million and a cost of capital of 9.5%. Assume that the firm is in stable growth, growing 3% a year forever and that the reinvestment rate is 35%. What is the return on invested capital? Samsco has current after-tax operating income of $65 million and a cost of capital of 9.5%. Assume that the firm is in stable growth, growing 3% a year forever and that the reinvestment rate is 35%. What is the return on invested capital?

Answer rating: 100% (QA)

To calculate the return on invested capital ROIC we can use the following formula ROIC O... View the full answer