1.DRT Corporation estimates that the free cash flows for years 1 and 2 will be $30,000 and $34,000 respectively. It believes that the free cash will grow at 7% per year after year 2. The WACC for the firm is 10%. Additional information for the firm is listed in the following.

Market value:

Non-operating assets (short- and long-term): $100,000

Debt (short- and long-term): $300,000

Common equity (50,000 shares): $900,000

1)What is the horizon value at t=2?