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Mexican Motors' market cap is 350 billion pesos. Next year's free cash flow is 9.8 billion pesos. Security analysts are forecasting that free cash flow

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Mexican Motors' market cap is 350 billion pesos. Next year's free cash flow is 9.8 billion pesos. Security analysts are forecasting that free cash flow will grow by 8.80% per year for the next five years. a.Assume that the 8.80% growth rate is expected to continue forever. What rate of return are investors expecting? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. b-1.Mexican Motors has generally earned about 11% on book equity (ROE =11% ) 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? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place. b-2. What would be the rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places

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