Valuing an Entity with Buy$-$Manage$-$Sell Model $-$ Value to all Stakeholders

Introduction

Just Q Tips $($IQT$)$ is a profinable, debt free entity,

operating in steady$-$state forever.

Despite this, the econamy is in recession, which has

depressed the price of JQT$\text{'}$s stock.

Your Equitw$/$Debt investor team is considering buying it and restructuring its debt

The asking price for $100$ s of the firm's stock is:

Your team believes that an optimal capital structure

for the firm would be:

$$150\mathrm{.}00MM$

If your team proceeds with the Just Q Tips transaction:

The equity imvestors will par $\frac{1-\frac{D}{D+E}}{?}$ of the purchase price

from their own funds,

Just Q Tips will take out a long$-$term loan at the moment of close,

provided by the debt investors on the team,

to pay the current owners the rest of the purchase price.

The equity imvestors will operate lust Q Tips in its

recapitalized steady$-$state for three vears.

At the end of this time:

$100\%$ of the stock will be resold for an estimated

and the load wil be terminated. $($Principal will be repaid$).$ PLEASE FIND $1-9$