In $2017,$ BMC Software generated $$465M$ of operating income $($earnings

before interest and taxes$)$ and $$295M$ of net income from $$2,200M$ of

sales. Over the next two years $(2018$ and $2019),$ the firm is projecting $10\%$

growth in operating income and $5\%$ growth in depreciation expense.

Beginning in $2020,$ BMC estimates that free cash flows will grow $2\%.$

Assume the firm's effective tax rate is $30\%,$ weighted average cost of

capital is $9\%,$ and number of shares outstanding is $146M.$ Depreciation

expense for $2017$ was $$105M$ while capital expenditures were $$55M.$

Capital expenditures are expected to remain constant over the next $5$

years. BMC expects working capital needs to increase by $$20M$ per year.

Lastly, the firm has $$250M$ in cash and cash equilavents and $$750M$ of

interest bearing debt.

in billions

Using IBM as a comparable firm, provide a valuation of the BMC Software's

equity per share basis based on EV$/$EBITDA$.($Note: base your answer on

the $2017$ financial since $2018$ numbers are not known yet$).$ What is BMC software Earining Per Share $?(1)29\mathrm{.}17$ per share$(2)$ @$3\mathrm{.}17$ per share $(3)26\mathrm{.}60$ per share $(4)34\mathrm{.}42$ per share