Hastings Corporation estimates that if it acquires Vandell Corporation, synergies will cause Vandell's free cash flows to be $$2\mathrm{.}5$ million, $$3\mathrm{.}2$ million,

$$3\mathrm{.}3$ million, and $$3\mathrm{.}90$ million at Years $1$ through $4,$ respectively, after which the free cash flows will grow at a constant $6\%$ rate. Hastings plans to

assume Vandell's $$9\mathrm{.}81$ million in debt $($which has a $9\%$ interest rate$)$ and raise additional debt financing at the time of the acquisition. Hastings

estimates that interest payments will be $$1\mathrm{.}6$ million each year for Years $1,2,$ and $3.$ After Year $3,$ a target capital structure of $30\%$ debt will be

maintained. Interest at Year $4$ will be $$1\mathrm{.}423$ million, after which the interest and the tax shield will grow at $6\%.$ Vandell currently has $1\mathrm{.}5$ million

shares outstanding and a target capital structure consisting of $30\%$ debt; its current beta is $1\mathrm{.}50($i$.$e$.,$ based on its target capital structure$).$ Vandell

and Hastings each have a $25\%$ combined federal$-$plus$-$state tax rate. The risk$-$free rate is $4\%$ and the market risk premium is $6\%.$

a$.$ What is Vandell's pre$-$acquisition levered cost of equity? What is its unlevered cost of equity? Do not round intermediate calculations. Round your

answers to two decimal places.

Pre$-$acquisition levered cost of equity:

Unlevered cost of equity:

$\%$

b$.$ What is the intrinsic unlevered value of operations at $t=0($assuming the synergies are realized$)?$ Enter your answer in millions. For example, an

answer of $$1\mathrm{.}23$ million should be entered as $1\mathrm{.}23,$ not $1,230,000.$ Do not round intermediate calculations. Round your answer to two decimal

places.

$

million

c$.$ What is the value of the tax shields at $t=0?$ Enter your answer in millions. For example, an answer of $$1\mathrm{.}23$ million should be entered as $1\mathrm{.}23,$ not

$1,230,000.$ Do not round intermediate calculations. Round your answer to two decimal places.

$

million

d$.$ What is the total intrinsic value of operations at $t=0?$ What is the intrinsic value of Vandell's equity to Hastings? What is the maximum price per

share that Hasting's should offer Vandell's shareholders? Enter your answers for the value of operations and the equity value to acquirer in millions.

For example, an answer of $$1\mathrm{.}23$ million should be entered as $1\mathrm{.}23,$ not $1,230,000.$ Do not round intermediate calculations. Round your answers to

two decimal places.

Value of operations: $

million

Equity value to acquirer: $

million

Maximum price: $

per share