Hastings Corporation is interested in acquiring Vandells Corporation. Vandell has 1 million shares outstanding and target capital structure consisting of 30% debt. Vandells debt interest rate is 8%. Assume that the risk free rate of interest is 5% and market risk premium is 6%. Both Hastings and Vandells face a 40% tax rate.

Vandells Free Cash Flow is $2 Million per year and expected to grow at a constant rate of 5% a year; its beta is 1.4. What is the value of Vandells operation? If Vandell has 10.82 million in debt, what is the current value of Vandells stock?