Estimating expected growth rate as a value driver

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Kenfront Ltd. is a firm that manufactures personal computers. As a top manager in the firm, you are considering changes in the way the firm is run. Currently, the firm has after-tax operating income of Sh. 80 million on capital invested of Sh. 280 million (at the beginning of the year). The firm also reinvests Sh. 55 million in net capital expenditures and working capital.

  1. Discuss various methods of estimating expected growth rate as a value driver
  2. Estimate the expected growth rate in earnings, given the firms current return on capital and re-investment rate

Reference no: EM132828157

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