The management of Mitchell Labs decided to go private in 2002 by buying all 3.50 million of its outstanding shares at $22.50 per share. By 2006, management had restructured the company by selling off the petroleum research division for $12.50 million, the fiber technology division for $7.75 million, and the synthetic products division for $24 million. Because these divisions had been only marginally profitable, Mitchell Labs is a stronger company after the restructuring. Mitchell is now able to concentrate exclusively on contract research and will generate earnings per share of $1.30 this year. Investment bankers have contacted the firm and indicated that if it reentered the public market, the 3.50 million shares it purchased to go private could now be reissued to the public at a P/E ratio of 17 times earnings per share. a. What was the initial cost to Mitchell Labs to go private