Hi
Free Cash Flow Y1 = -$20
Free Cash Flow Y2 = $48
Free Cash Flow Y3 = $50.50
Y2 to Y3 growth rate g = 50.50/48 -1
= 5.21%
Total corporate Value will be equal to present value of future free cash flow.
WACC =14%
So corporate value = -20/(1+14%) + 48/(1+14%)^2 + 50.5/(1+14%)^3 + 50.5*(1+5.21%)/(14%-5.21%)*(1+14%)^3
= $461.38 million
Hence option E is correct here.
Thanks
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