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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

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 $
7
.
8
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 Orca and Shark is
1
1
percent and
9
percent, respectively. Shark currently has
3
million shares of stock outstanding and $
2
5
million in debt outstanding. What is the maximum price per share Orca should pay for Shark?

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