Schultz Industries is considering the purchase of Arras Manufacturing. Arras is currently a supplier for Schultz and...

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Schultz Industries isconsidering the purchase of Arras Manufacturing. Arras is currentlya supplier for Schultz and the acquisition would allow Schultz tobetter control its material supply. The current cash flow fromassets for Arras is $7.3 million. The cash flows are expected togrow at 5 percent for the next five years before leveling off to 2percent for the indefinite future. The costs of capital for Schultzand Arras are 9 percent and 7 percent, respectively. Arrascurrently has 3 million shares of stock outstanding and $25 millionin debt outstanding.
What is the maximumprice per share Schultz should pay for Arras? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

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Maximum Price per share to be paid by Schultz for Arras Maximum Price per share Schultz should pay for Arras Value of the firm Value of Debt Number of common shares outstanding Value of the firm Present Value of Annual Cash flows Present Value of See Answer

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Schultz Industries isconsidering the purchase of Arras Manufacturing. Arras is currentlya supplier for Schultz and the acquisition would allow Schultz tobetter control its material supply. The current cash flow fromassets for Arras is $7.3 million. The cash flows are expected togrow at 5 percent for the next five years before leveling off to 2percent for the indefinite future. The costs of capital for Schultzand Arras are 9 percent and 7 percent, respectively. Arrascurrently has 3 million shares of stock outstanding and $25 millionin debt outstanding.What is the maximumprice per share Schultz should pay for Arras? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)