Kollmorgen Corporation, a diversified technology company, reported sales of $194.9 million in 1992 and had a net loss of $1.9 million in that year. Its net in come had traced a fairly volatile course over the previous five years: YearNet Income 1987 1988 1989 $ 0.3 million $11.5 million 2.4 million $ 7.2 million 4.6 million 1990 1991 The stock had a beta of 1.20, and the normalized net income was expected to increase 6% a year until 1996, after which the growth rate was expected to stabilize at 5% a year (the beta will drop to 1.00). The depreciation amounted to $8 million in 1992, and capital spending amounted to $10 million in that year. Both items were expected to grow 5% a year in the long term. The firm expected to maintain a debt ratio of 35%. (The treasury bond rate was 7%, and the risk premium is 5.5%.) a. Assuming that the average earnings from 1987 to 1992 represents the normalized earnings, estimate the normalized earnings and free cash flow to equity. b. Estimate the value per share.