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Question 7 (4 marks) Boxity Corporation is a medical equipment manufacturing company. The company has reported earnings before interest and taxes of $ 180 million
Question 7 (4 marks) Boxity Corporation is a medical equipment manufacturing company. The company has reported earnings before interest and taxes of $ 180 million this year. It has a tax rate of 25% and expects earnings to grow 4% a year in perpetuity. The firm has a return on capital of 12.5% and a cost of capital of 10% that are expected to maintain in perpetuity. Estimate the reinvestment amount and the terminal value this year for Boxity Corporation
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