Valuation Of Vaccaro: Estimating The Discount Rate, Dollar Value, And Maximum Price Per Share For Acquisition

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Valuation of Vaccaro: Estimating the Discount Rate, Dollar Value, and MaximumPrice per Share for Acquisitiona.What discount rate should be used to discount the estimated cash flows? (Hint:Use Apilado's rstodetermine the market riskpremium.)Round your answer to two decimal places.________%Cost of equity rs= 14%Risk free rate rrf= 4%Beta b = 1.0rs= rrf+ (RPm) * b14 = 4 + (RPm) * 1.0RPm= (14-4)/1.0RPm= 10%Discount Rate = rrf+ (RPm) * b= 4 + 10* 1.75= 4 +10.5=21.5%b.What is the dollar value of Vaccaro to Apilado? Round your answer to two decimal places. Enter youranswer in millions. For example, an answer of $13,000,000 should be entered as 13.$________millionInput 0, 1.30, 1.50, 1.75, and 26.94(2.00 + 24.94) into the cash flow register, I = 21.5%,NPV =1.3/1.215 + 1.5/(1.215)2+ 1.75/(1.215)3+ 24.94/(1.215)4=$14.51millionc.Vaccaro has 1.2 million common shares outstanding. What is the maximum price pershare that Apiladoshould offer for Vaccaro? Round your answer to the nearest cent.$________PMax= V/N = $14.51/1.2 =$12.1

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