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The current net working capital of ABC company is $2.5 million. The company is expecting that this will grow at 3.5 per cent per year
The current net working capital of ABC company is $2.5 million. The company is expecting that this will grow at 3.5 per cent per year forever. The company has a cost of capital of 11 per cent. If ABC company manages to reduce this growth to 3 per cent, then what would be the effect of this reduction on the value of ABC firm?
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