A group of Investors is intent on purchasing a publicly traded company and wants to estimate the highest price they can reasonably

justlfy paying. The target company's equity beta is $1\mathrm{.}20$ and its debt$-$to$-$firm value ratio, measured using market values, is $60$ percent.

The Investors plan to Improve the target's cash flows and sell It for $12$ times free cash flow in year five. Projected free cash flows and

selling price are as follows.

To finance the purchase, the Investors have negotlated a $$470$ million, ive$-$year loan at $8$ percent Interest to be repald in five equal

payments at the end of each year, plus interest on the declining balance. This will be the only interest$-$bearing debt outstanding after

the acquisition.

a$.$ Estimate the target firm's asset beta.

Note: Round your answer to $2$ decimal places.

Answer is complete and correct.

b$.$ Estimate the target's unlevered, or all$-$equily. cost of capital $(K_A).$

Note: Round your answer to $1$ decimal place.

Answer is complete and correct.

c$.$ Estimate the target's all$-$equity present value.

Note: Enter your answer in millions rounded to $2$ decimal places.

Answer is complete but not entirely correct.

$\backslash$table$[[$Target$\text{'}$s all$-$equity present value,$$630\mathrm{.}22,$million$]]$

d$.$ Estimate the present value of the interest tax shields on the acquisition debt discounted at $K_A.$

Note: Round intermedlate calculations to $2$ decimal places. Enter your answer in millions rounded to $2$ decimal places.

Answer is complete but not entirely correct.