A security analyst is evaluating Pine Tree Syrup, Inc. (NYSE: PTS) using a two-stage FCFF valuation model. The analyst has accumulated the following information.
• Current FCFF = $10 million
• Growth rate of FCFF
Stage 1: 5 percent annually for Years 1 to 3
Stage 2: 2 percent in Year 4 and thereafter
• Equity beta = 2.0, risk-free rate = 2 percent, and equity risk premium = 6 percent
• Cost of debt before-tax = 8 percent
• Marginal tax rate = 25 percent
• Capital structure = 50 percent debt, 50 percent equity
• Long-term debt = $50 million
• Outstanding shares = 5.5 million
Based on the information above, estimate the value of equity per share.