Consider the following scenario:

Spentworth Industries Corp. is considering an acquisition of Keedsler Motors Co$.,$ and estimates that acquiring Keedsler will result in

incremental after$-$tax net cash flows in years $1-3$ of $$6\mathrm{.}00$ million, $$9\mathrm{.}00$ million, and $$10\mathrm{.}80$ million, respectively.

After the first three years, the incremental cash flows contributed by the Keedsler acquisition are expected to grow at a constant rate of

$4\%$ per year. Spentworth's current beta is $0\mathrm{.}80,$ but its post$-$merger beta is expected to be $1\mathrm{.}04.$ The risk$-$free rate is $3\mathrm{.}5\%,$ and the

market risk premium is $5\mathrm{.}60\%.$

Based on this information, complete the following table by selecting the appropriate values $($Note: Do not round intermediate calculations, but round

your answers to two decimal places$)$:

Value

Post$-$merger cost of equity

$9\mathrm{.}3240\%vv$

Projected value of the cash flows at the end of three years

The value of Keedsler Motors Co$.\text{'}$s contribution to Spentworth Industries Corp.

Keedsler Motors Co$.$ has $5$ million shares of common stock outstanding. What is the largest tender offer Spentworth Industries Corp. should make on

each of Keedsler Motors Co$.\text{'}$s shares?

$$29\mathrm{.}24$

$$36\mathrm{.}55$

$$43\mathrm{.}86$