Harrison Corporation is interested acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 5% and the market risk premium is 6%.

21-3

On the basis of your answer to problems 21-1 and 21-2. If Harrison were to acquire Van Buren, what would be the range of possible prices it could bid for each share of Van Buren common stock?

21-1

Van Buren currently expects to pay a year-end dividend of $2.00 a share (d1=$2.00). Van Buren