OHM Corporation, an environmental service provider, had revenues of \($209\) million in 1992 and reported losses of \($3.1\) million. It had earnings before interest and taxes of \($12.5\) million in 1992, and had debt outstanding of \($104\) million (in market value terms). There were 15.9 million shares outstanding, trading at \($11\) per share. The pretax interest rate on debt owed by the firm was 8.5%, and the stock had a beta of 1.15. The firm's EBIT was expected to increase 10% a year from 1993 to 1996, after which the growth rate is expected to drop to 4% in the long term. The return on capital in stable growth is 10%. (The corporate tax rate was 40%, the Treasury bond rate was 7%, and the market risk premium is 5.5%.)

a. Estimate the cost of capital for OHM.

b. Estimate the value of the firm.

c. Estimate the value of equity (both total and on a per share basis).