(PLEASE MAKE ANSWER CLEAR) Permian Partners (PP) produces from aging oil fields in west Texas. Production is 1.82 million barrels per year in 2016, but production is declining at 9% per year for the foreseeable future. Costs of production, transportation, and administration add up to $25.20 per barrel. The average oil price was $65.20 per barrel in 2016.

PP has 7.2 million shares outstanding. The cost of capital is 11%. All of PPs net income is distributed as dividends. For simplicity, assume that the company will stay in business forever and that costs per barrel are constant at $25.20. Also, ignore taxes.

a. Assume that oil prices are expected to fall to $60.20 per barrel in 2017, $55.20 per barrel in 2018, and $50.20 per barrel in 2019. After 2019, assume a long-term trend of oil-price increases at 7% per year. What is the ending 2016 value of one PP share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Share value₂₀₁₆ = ?

b-1. What is PPs EPS/P ratio? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

EPS/P ratio = ?

b-2. Is it equal to the 11% cost of capital?