Hastings estimates that if it acquires Vandell, interest payments will be $1,500,000 per year for 3 years after which the current target capital structure of 30 percent debt will be maintained.

Interest in the fourth year will be $1.472 million after which interest and the tax shield will grow at 5 percent. Synergies will cause the free cash flows to be $2.5 million, $2.9 million, $3.4 million, and then $3.57 million, after which the free cash flows will grow at a 5 percent rate.

What is the unlevered value of Vandell and what is the value of its tax shields? What is the per share value of Vandell to Hastings Corporation? Assume Vandell now has $10.82 million in debt.