Kenneth Cole Productions (KCP) was acquired in 2012 for a purchase price of $15.25 per share. KCP had 18.5 million shares outstanding, $45 million in cash and no debt at the time of the acquisition. a. Given a weighted average cost of capital of 11%, and assuming no future growth, what level of annual free cash flow would justify this acquisition price? b. If KCP's current annual sales are $480 million, assuming no net capital expenditures or increases in net working capital, and a tax rate of 35%, what EBIT margin does your answer in part (a) require.

a. Given a weighted average cost of capital of 11%, and assuming no future growth, what level of annual free cash flow would justify this acquisition price? Part 2 The level of annual free cash flow that would justify this acquisition price is $__ million.

b. If KCP's current annual sales are $476 million, assuming no net capital expenditures or increases in net working capital, and a tax rate of 40%, what EBIT margin does your answer in part (a) require.