Sid Auto a national auto parts chain is considering purchasing a smaller chain S

Sid Auto a national auto parts chain is considering purchasing a smaller chain South Georgia Parts (SGP). Sids analysts project that the merger will result in the following incremental free cash flows and horizon values (in millions):Year 1 2 3 4Free cash flow $2 $4 $5 $10Unlevered horizon value 107Assume that all cash flows occur at the end of the year. SGP is currently financed with 30% debt at a rate of 10%. The acquisition would be made immediately and if it is undertaken SGP would retain its current $15 million of debt and issue enough new debt to continue at the 30% target level. The interest rate would remain the same. SGPs pre-merger beta is 2.0 and its post-merger tax rate would be 34%. The risk-free rate is 8% and the market risk premium is 4%. What is the value of SGP to Sid?