Water and Power Co$.($W&P$)$ is considering an acquisition of Thatherton Fuels., and estimates that acquiring Thatherton will result i

incremental after$-$tax net cash flows in years $1-3$ of $$9$ million, $$13\mathrm{.}5$ million, and $$16\mathrm{.}2$ million, respectively.

After the first three years, the incremental cash flows contributed by the Thatherton acquisition are expected to grow at a constant rate

of $4\%$ per year. W&P$\text{'}$s current beta is $0\mathrm{.}80,$ but its post$-$merger beta is expected to be $1\mathrm{.}04.$ The risk$-$free rate is $4\%,$ and the market

risk premium is $6\mathrm{.}10\%.$

Based on this information, complete the following table by selecting the appropriate values. $($Note: Round your intermediate calculations to two

decimal places.$)$

Value

Post$-$merger cost of equity

Projected value of the cash flows at the end of three years

The value of Thatherton Fuels' contribution to Water and Power Co$.($W&P$)$

Thatherton Fuels has $4$ million shares of common stock outstanding. What is the largest tender offer Water and Power Co$.($W&P$)$ should make on each

of Thatherton Fuels' shares?

$$68\mathrm{.}75$

$$45\mathrm{.}83$

$$57\mathrm{.}29$