Excel Online Structured Activity: Merger Valuation Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandel's debt interest rate is 7.2%. Assume that the risk-free rate of interest is 6% and the market risk premium is 8%. Both Vandell and Hastings face a 35% tax rate. Hastings estimates that if it acquires Vandell, interest payments will be $1,600,000 per year for 3 years after which the current target capital structure of 30% debt will be maintained. Interest in the fourth year will be $1.411 million after which interest and the tax shield will grow at 4%. Synergies will cause the free cash flows to be $2.4 million, $3.1 million, $3.4 million, and then $3.76 million in Years 1 through 4, respectively, after which the free cash flows will grow at a 4%