You are evaluating a potential takeover target. A junior analyst on your team provided the target FCFF forecast below. In addition, you have information about the target's debt, interest expenses, tax rate, and unlevered cost of equity. a Estimate the target's firm value based on its free cash flows and interest tax shield (i.e. use compressed APV method) b Estimate the target's total equity value c If the target firm has 12 million shares outstanding, what's the maximum you would recommend paying for the target on a per share basis? Year 0 1 2 3 4 5 6 FCFF 8.0 7.4 9.9 12.1 13.5 (in millions) 6% FCFF growth rate, indefinitely Interest expense 2.0 2.4 2.6 2.9 3.2 2% Int. exp. growth rate, indefinitely 32% Tax rate 12 million shares outstanding 12.0% rE,U 40.0 Pre-merger debt (millions)