. XYZ has positive FCFs and a perpetual growth rate of 5%, Return on Invested Capital (ROIC)l is fixed at 20% and the WACC is 20%. If XYZ would double its reinvestment rate (plowback) and nothing else changed, what will happen to its Continuing Value (CV)?

Multiple Choice

The CV will be unchanged

The CV will double

The CV will more than double

The CV will decline by approximately 25%