4. Thomas Plc generated $50 million in net income during the year on book equity of $300 million. The reported net income includes the 4% interest it earned on its cash balance of $100m.The company...

4. Thomas Plc generated $50 million in net income during the year on book equity

of $300 million. The reported net income includes the 4% interest it earned on

its cash balance of $100m.The company also reported $30 million of

depreciation and $40 million of capital expenditures. Its non-cash working

capital increased by $10 million, and debt increased by $10 million to $310

million. The cash balance at the end of the year was $115 million. If the cost of

equity is 10%, and the tax rate is 25%, estimate

a. Equity reinvestment rate.