Suppose you are interested in acquiring a struggling company, Arisa Inc. What would be the maximum stock price that you can offer? Answer by computing Arisa's intrinsic value by estimating the re, WACC, and FCFs based on the following information:

- Sales growth rate is expected to increase to 15% between years 1 and 3, 8% between years 4 and 6, 5% between years 7 and 9, and 3% in year 10 - COGS is expected to decrease to 67% of sales - SG&A expenses are estimated to increase to 13% of sales - Depreciation, Interest Expense, Non-Operating Income, and all balance sheet items are expected to grow at the same rates as sales growth - Capital expenditures in year 1 will be $320.28 and will grow at 8% until year 9. In Year 10, it will grow at 3% - Arisa has 47 million common shares outstanding and its stock is currently trading at $22.45 - Your total-debt-to-asset ratio goal is 60% - Equity beta should be 1.6, the risk-free rate is 4%, the return on the market is 11% - the tax rate is 21% - yields on debt are 6.5% - dividends are considered as the plug variable

Arisa's most recent financial information is given below:

INCOME STATEMENT	Year 0
Sales	$2,431.40
COGS	$1,816.10
SG&A	$292.40
Depreciation	$123.00
EBIT	$199.90
Interest Expense	$114.10
Non-Operating Income	$15.60
Pretax Income	$24.40
Total Income Taxes	$6.50
Net Income	$9.90
BALANCE SHEET
Cash & Equivalents	$75.60
Inventories	$212.90
Other Current Assets	$458.40
Total Current Assets	$746.90
Fixed Assets	$1,192.20
Total Assets	$1,939.10
Accounts Payable	$81.30
Other Current Liabilities	$287.00
Total Current Liabilities	$368.30
Long Term Debt	$1,350.40
Total Liabilities	$1,718.70
Total Equity	$220.40
Total Liabilities & Equity	$1,939.10