Merger Valuation

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 4%, and the market risk premium is 5%.

Harrison estimates that if it acquires Van Buren, the year-end dividend will remain at $1.52 a share, but synergies will enable the dividend to grow at a constant rate of 6% a year (instead of current 5%). Harrison also plans to increase the debt ratio of what would be its Van Buren subsidiary; the effect of this would be to raise Van Buren's beta to 1.1. What is the per-share value of Van Buren to Harrison Corporation? Do not round intermediate calculations.