Stark Corporation reported EBITDA of $$1290$ million in $2021$ and depreciation charges of

$$400$ million. The firm expects revenues, earnings, capital expenditures, net working capital,

and depreciation to grow at $9\mathrm{.}5\%$ a year from $2022$ to $2026,$ after which the firm's cash flows

will grow with $2\%$ growth rate indefinitely. Capital Expenditures are estimated to be $$493m$

in $2022$ and working capital will be $$90$ million. The tax rate for the firm is $21\%.$

The firm has debt outstanding trading at a market value of $$3\mathrm{.}2$ billion, and yielding a pre$-$tax

debt interest rate of $8\%.$ There were $62$ million shares outstanding, trading at $$64$ per share,

and the most recent beta is $1\mathrm{.}10.$ The treasury bond rate is $3\mathrm{.}5\%$ and the market risk premium

$6\%.$

The company also plans to lower its debt$/$equity ratio to $50\%$ for the steady state $($which will

result in the pre$-$tax debt interest rate dropping to $7\mathrm{.}5\%.)$

A$.$ Estimate the value of the firm. $(10$ points$)$

B$.$ Estimate the value of the equity in the firm and the value per share. $(5$ points$)$