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Mlzuhara Inc. is a chemical manufacturing company,r which reported earnings before Interest and taxes of 150 million this year. The rm has a cost of
Mlzuhara Inc. is a chemical manufacturing company,r which reported earnings before Interest and taxes of 150 million this year. The rm has a cost of capital of 10 percent, a tax rate of 40 percent and expects earnings to grow percent a year in perpetuity. You know that the firm has no working capital requirements but does have net capital expenditures that it needs to make to grow. The firm has return on capitai of 12.5 percent that it expects to maintain in perpetuity. 3. Estimate the net capital expenditures for Mizuhara, given the expected growth rate and return on capital. b. Estimate the value of the firm
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