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please show all formula's used and working out 1. Vernon Enterprises has current after-tax operating income of $100 million and a cost of capital of

image text in transcribedplease show all formula's used and working out

1. Vernon Enterprises has current after-tax operating income of $100 million and a cost of capital of 10 percent. The firm earns a return on capital equal to its cost of capital. a. Assume that the firm is in stable growth, growing 5 percent a year forever; estimate the firm's reinvestment rate. b. Given this reinvestment rate, estimate the value of the firm. c. What is the value of the firm, if you assume a zero reinvestment rate and no growth

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