Amarindo, Inc. (AMR), is a newly public firm with 9.0 million shares outstanding. You are doing a valuation analysis of AMR. You estimate its free cash flow in the coming year to be $15.35 million, and you expect the firm's free cash flows to grow by 3.8% per year in subsequent years. Because the firm has only been listed on the stock exchange for a short time, you do not have an accurate assessment of AMR's equity beta. However, you do have beta data for UAL, another firm in the same industry:LOADING... AMR has a much lower debt-equity ratio of 0.45, which is expected to remain stable, and its debt is risk free. AMR's corporate tax rate is 30%, the risk-free rate is 4.6%, and the expected return on the market portfolio is 11.1%.

a. Estimate AMR's equity cost of capital.

b. Estimate AMR's share price.

	Equity Beta	Debt Beta	Debt-Equity Ratio
UAL	2.25	0.45	1.5