Question
what are the values for division A and B if you assume that operating income is constant to perpetuity? the company pays out 50 and
what are the values for division A and B if you assume that operating income is constant to perpetuity? the company pays out 50 and so finances its investments for 300. The company invests everything in division B at the same return on capital employed 30%. how much value is created? same question if the 300 is invested in division A at the average return of A 5% same question if the 300 is divided equally between A and B Given capital employed division A is 1000 and division B is 1000 Expected return division A is 15% and division B is 15% net operating income division A is 50 and division B is 300%
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