It is December 2022. You work as a financial analyst for Merck & Co. and are tasked with the due diligence on the propos

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It is December 2022. You work as a financial analyst
for Merck & Co. and are tasked with the due diligence on
the proposed acquisition of a biotech startup. You estimated
the following cash flows for the startup:
After 2027, cash flows are expected to grow by 5% per year.
Based on the riskiness of your industry, you think that your
weighted average cost of capital is 15%.
The biotech firm has 5 million shares and bonds worth
$120 million outstanding.
Part 1
What is the terminal value, i.e., the present value of all free
cash flows from 2028 to infinity expressed in 2027-dollars (in $
million)?
Part 2
What is the total value of the company (in $ million)?
Part 3
What is the value per share of common stock (in $)?