Mckenzie, inc. reported ebit of $8.5 million for last year. depreciation expense totaled $5 million and capital expenditures came to $2 million. free cash flow is expected to grow at a rate of 2.5% for the foreseeable future. mckenzie faces a 40% tax rate and has a 0.50 debt to equity ratio with $20 million (market value) in debt outstanding. mckenzie's equity beta is 1.4, the risk- free rate is currently 5% and the market risk premium is estimated to be 7.5%. mckenzie has 10 million shares of common stock outstanding. what is the current value of a share of mckenzie stock?

a. $7.32
b. $6.62
c. $10.25
d. $8.45
e. $5.83