4-28 Valuing a business Mexican Motors market cap is 300 billion pesos. Next years free cash flow is 9.6 billion pesos. Security analysts are forecasting that free cash flow will grow by 8.60% per year for the next five years. a.Assume that the 8.60% growth rate is expected to continue forever. What rate of return are investors expecting? Note: Do not round intermediate calculations. b-1.Mexican Motors has generally earned about 14% on book equity (ROE = 14%) and reinvested 50% of earnings. The remaining 50% of earnings has gone to free cash flow. Suppose the company maintains the same ROE and investment rate for the long run. What will be the growth rate of earnings? b-2.What would be the rate of return