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Problem 22 03 Merger Bid nar and nays an 7.79% interest rate Vandell's tree cash flow (FCE) is $1 millicn ner vear and is exnerted to grow at a constant rate of 5% a vear Poth Vandell and Hastings nay a 309% combined federal and state tax rate The risk-free rate of interest is 496 and the market risk premium is 6 %. Hastings Corporation estimates that if it acqures Vandell Corporation, ergies will cause Vandell's free cash flaws to be $2.6 millipn. $3.1 million, $3.5 millian, and $3.60 million at Years through 4, respectively, after which the free cash flows will grow at a .78 million in debt (which has an 7.7 % interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.5 million each year for Years 1, 2, constant 5% rate. Hastings plans assume Vandell's 457 million, after which the interest and the tax shield will grow at 5% . and 3. After Year 3, a target capital structure of 30% debt will maintained. Interest at Year 4 will be $1 Indicate the range of possible prires that Hastings culd bid for each share of Vandell commen stack in an acquisition. Round your answers to the nearest cent. Do not round intermediate calulations. The Id for each share should range between per share. per share and s Problem 22 03 Merger Bid nar and nays an 7.79% interest rate Vandell's tree cash flow (FCE) is $1 millicn ner vear and is exnerted to grow at a constant rate of 5% a vear Poth Vandell and Hastings nay a 309% combined federal and state tax rate The risk-free rate of interest is 496 and the market risk premium is 6 %. Hastings Corporation estimates that if it acqures Vandell Corporation, ergies will cause Vandell's free cash flaws to be $2.6 millipn. $3.1 million, $3.5 millian, and $3.60 million at Years through 4, respectively, after which the free cash flows will grow at a .78 million in debt (which has an 7.7 % interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.5 million each year for Years 1, 2, constant 5% rate. Hastings plans assume Vandell's 457 million, after which the interest and the tax shield will grow at 5% . and 3. After Year 3, a target capital structure of 30% debt will maintained. Interest at Year 4 will be $1 Indicate the range of possible prires that Hastings culd bid for each share of Vandell commen stack in an acquisition. Round your answers to the nearest cent. Do not round intermediate calulations. The Id for each share should range between per share. per share and s

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