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Sears Inc. has the following financing outstanding:

• Debt: 450,000 bonds with a coupon rate of 6.5% and a current price of 80% of par. The bonds have 15 years to maturity and a par value of $1,000. The bond has semiannual compounding.
• Equity: 2.9 million shares of common stock with a current price of $90 per share and the beta of the stock is 1.30.
• Market: The corporate tax rate is 21%, the expected market return is 11.0%, and the risk-free rate is 1.26%.

Sears is considering purchasing Broke N Bored Grill, a privately held restaurant. Broke N Bored currently has debt outstanding with a market value of $25 million. The EBIT for Broke N Bored next year is projected to be $19 million. EBIT is expected to grow at 12% per year for the next five years before slowing to 3% in perpetuity. Change in Net Working Capital, Capital Spending, and Depreciation as a percentage of EBIT are expected to be 11%, 3%, and 2%, respectively. Broke N Bored has 10 million shares outstanding and the tax rate is 21%.

1. What is the after-tax cost of debt for Sears Inc?
2. What is the cost of equity for Sears Inc?
3. What is the weight of debt and weight of common stock for Sears Inc?
4. What discount rate should Sears use to evaluate the potential purchase of Broke N Bored?
5. What are the Cash Flows for Broke N Bored expected to be in Years 1 - 5 (i.e., what is CF(A) for Years 1 - 5)?
6. What is the terminal value of Broke N Bored's cash flows?
7. What is the total value of Broke N Bored Grill worth to Sears today?
8. What is the value of Broke N Bored equity?
9. What is the maximum price per share Sears should be willing to pay for Broke N Bored?