Attempts: Average:14 a. Problem 22-01 eBook Problem Walk-Through Problem 22-01 Valuation of Merger Target Hastings Corporation is interested in acquiring Vande or ration. Vandell has 1 million shares outstanding and a ta et capital structure consisting 13 % debt its be is 125 given its tar et capital structure . dell has $9 15 10 inde at trades at par and pays an 7.8% interest rate. V dell's free cash now FCF ) is $2 million per year and is expected to grow at a constant ate or 4% a year vandell pays a 40% combined federal and state tax rate. The sk-tree rate or interest is 4% and the market risk premium is 5%. Hastings, first step is lo estimate the current intrinsic value ot Vandell a. What are Vandell's cost of equity and weighted average cost of capital? Round your answer to two decimal places. Do not round intermediate calculations. Cost of equity: WACC: b. What is Vandell's intrinsic value of operations? (Hint: Use the free cash flow corporate valuation model.) Round your answer to two decimal places. Do not round intermediate calculations. million c. What is the current intrinsic value of Vandell's stock? Round your answer to the nearest cent. Do not round intermediate calculations. share