Considering the purchase of arras manufacturing

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Reference no: EM131862078

Schultz Industries is considering the purchase of Arras Manufacturing. Arras is currently a supplier for Schultz, and the acquisition would allow Schultz to better control its material supply. The current cash flow from assets for Arras is $7.4 million. The cash flows are expected to grow at 9 percent for the next five years before leveling off to 6 percent for the indefinite future. The cost of capital for Schultz and Arras is 13 percent and 11 percent, respectively. Arras currently has 3 million shares of stock outstanding and $25 million in debt outstanding. What is the maximum price per share Schultz should pay for Arras? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) Price per share.

Reference no: EM131862078

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Considering the purchase of arras manufacturing : Schultz Industries is considering the purchase of Arras Manufacturing. What is the maximum price per share Schultz should pay for Arras?

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