A firm had a free cash f low (FCF) in t he prior year of $125 million. The FCF is expected to grow at 3 per cent per year into perpetuity. The appropriate discount rate is 12 percent. What is t he firm’s current value (in millions) based on the FCF model?

a. $1,042

b. $1,389

c. $1,555

d. $1,431.