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10. Bank of Evil Corp. currently have a return on capital (ROC) equal to 6%, a weighted-average cost of capital (WACC) equal to 8% and
10. Bank of Evil Corp. currently have a return on capital (ROC) equal to 6%, a weighted-average cost of capital (WACC) equal to 8% and a capital reinvestment rate of 50% leading to a forward (EBIFV-T) ratio of 10. What would happen to Bank of Evil Corp.s (CapXal) ratio if they reduce their capital reinvestment rate to 0% in perpetuity? (a) 0.75. (b) 1.00. (c) 1.33. (d) 2.50
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