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McDonalds is considering the purchase of Yukon Commercial Bakeries. Yukon bakes hamburger buns and bagels used by several fast food restaurant chains, including McDonalds, McDonalds

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McDonalds is considering the purchase of Yukon Commercial Bakeries. Yukon bakes hamburger buns and bagels used by several fast food restaurant chains, including McDonalds, McDonalds sees the purchase as a way to maintain a consistent supply of bakery products to its Canadian operators and franchisees. The current free cash flow for Yukon is $28.9 million. The cash flows are expected to grow at 7 percent for the next five years before leveling off to 4 percent for the indefinite future. The cost of capital for McDonalds and Yukon is 11 percent and 9 percent, respectively. Yukon is publicly traded and has 18 million shares of stock outstanding and $142 million in debt outstanding. Yukon also has $28 million in cash and cash equivalents. What is the maximum price per share McDonalds should pay for Yukon Commercial Bakeries? O $34.23 O $31.71 O $30.03 O $37.92 O $20,58

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