you 6. Crabbe Steel owns a number of steel plants in Pennsylvania. The firm reported vested of $400 million. The firm expects operating income to grow 7% a year after-tax operating income of $40 million in the most recent year on capital in a. If the firm's cost of capital is 10% and you expect the firm's current return on capital to continue in perpetuity, estimate the value at the end of the third b. If you expect operating income to stay fixed after year 3 (what you earn in year 3 is what you will earn every year thereafter), estimate the terminal the next three years, and 3% thereafter. year. value. c. If you expect operating income to drop 5% a year in perpetuity after year 3, 7. How would your answers to the preceding problem change if you were told that the cost of capital for the firm is 8%