questions a & b-1

Permian Partners (PP) produces from aging oil fields in west Texas. Production is 1.99 million barrels per year in 2018, but production is declining at 5% per year for the foreseeable future. Costs of production, fransportation, and administration adid up to $26.90 per barrel. The average ofl price was $66.90 per barrel in 2018 PP has 8.9 milion shares outstanding. The cost of capital is 7%. All of PP's net income is distributed as dividendis. For simplicity. assume that the company will stay in business forever and that costs per barrel are constant at $26.90. Also, ignore taxes. a. Assume that oil prices are expected to fall to $61.90 per barrel in 2019,$56,90 per barrel in 2020 , and $51,90 per barret in 2021 After 2021 , assume a long-term trend of oil-price increases at 3% per year. What is the ending 2018 value of one PP share? (Do not round intermediate colculations. Round your onswer to 2 decimal places.) b-1. What is PP's EPS P ratio? (Do not round intermediote calculations. Round your onswer to 4 decimal places,)