EAT $95 $106 $117 $130 The company also receives a royalty net after taxes of $10 million per year. it is expected that the cash ows equal to depreciation will have to be reinvested to keep the rm operating. Further, capital expenditures equal to 60 percent of the net cash flow will need to be invested to keep the rm growing. Other items on the balance sheet remain unchanged. The CFO believes that it will just forecast for the rst three years and then simply assume a 6 percent annual growth rate after the third year. T-bills yield 8 percent and the market return is 13 percent. The company's beta using Hamada equation is 1.2. What is the value of the company or what would you pay for the rm if you were interested in it