ABC Waterhouse's free cash flow next year will be $250 million and it is widely expected to grow at a 5 percent annual rate indefinitely. The company's weighted average cost of capital is 11 percent, the market value of its liabilities is $2.5 billion, and it has 32 million shares outstanding.

A private equity firm believes that by selling 200 of the companys small water towers, increasing the work day to eight hours, and instituting other cost savings, it can increase ABC's free cash flow next year to $260 billion and can add a full percentage point to ABC's growth rate without affecting its cost of capital.

What is the maximum price per share the private equity firm can justify bidding for control of ABC?

	a.	$22.90
	b.	$33.33
	c.	$57.29
	d.	$110.98