Item$11$

$9\mathrm{.}1$

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Problem $13-20$ Firm Valuation

Orca Industries is considering the purchase of Shark Manufacturing. Shark is currently a supplier for Orca and the acquisition would allow Orca to better control its material supply. The current cash flow from assets for Shark is $$6\mathrm{.}7$ million. The cash flows are expected to grow at $6$ percent for the next five years before leveling off to $3$ percent for the indefinite future. The costs of capital for Orca and Shark are $10$ percent and $8$ percent, respectively. Shark currently has $3$ million shares of stock outstanding and $$25$ million in debt outstanding.

What is the maximum price per share Orca should pay for Shark? $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$