Sunny Squirrel Fabricators Inc. is considering an acquisition of Orator Telecom Inc. Sunny Squirrel Fabricators Inc. estimates that acquiring Orator will result in incremental value for the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company.

Data Collected $($in millions of dollars$)$

Year $1$ Year $2$ Year $3$

EBIT $$12\mathrm{.}0$ $$14\mathrm{.}4$ $$18\mathrm{.}0$

Interest expense $5\mathrm{.}05\mathrm{.}56\mathrm{.}0$

Debt $29\mathrm{.}735\mathrm{.}137\mathrm{.}8$

Total net operating capital $109\mathrm{.}2111\mathrm{.}3113\mathrm{.}4$

Orator is a publicly traded company, and its market$-$determined pre$-$merger beta is $1\mathrm{.}20.$ You also have the following information about the company and the projected statements.

$$ Orator currently has a $$10\mathrm{.}00$ million market value of equity and $$6\mathrm{.}50$ million in debt.

$$ The risk$-$free rate is $3\mathrm{.}5\%$ with a $5\mathrm{.}60\%$ market risk premium, and the Capital Asset Pricing Model produces a pre$-$merger required rate of return on equity rsL

of $10\mathrm{.}22\%.$

$$ Orator$$s cost of debt is $5\mathrm{.}50\%$ at a tax rate of $35\%.$

$$ The projections assume that the company will have a post$-$horizon growth rate of $4\mathrm{.}50\%.$

$$ Current total net operating capital is $$106\mathrm{.}0$ million, and the sum of existing debt and debt required to maintain a constant capital structure at the time of acquisition is $$27$ million.

$$ The firm has no nonoperating assets, such as marketable securities$.$ With the given information, use the free cash flow to equity $($FCFE$)$ approach to calculate the following values involved in the merger analysis. $($Note: Round your answer to two decimal places.$)$

FCFE horizon value $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Value of FCFE $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ The estimated value of Orator$$s operations after the merger is $\_\_\_\_\_$ than the market value of Orator$$s equity. This means that the wealth of Orator$$s shareholders will $\_\_\_\_\_$ if it merges with Sunny Squirrel rather than remaining as a stand$-$alone corporation.