A firm has a beta of 1.45. The current risk-free rate is 3% and the market risk premium is 9%.

The firm just had free cash flows of $2.12 per share. The firm expects FCFs to grow at the

sustainable growth rate forever, based upon a Net Income of$20M, Total Debt of $70M, Total

Assets of $160M, and a retention ratio of 52%. Given this, what valuation would the FCF model

provide?

a. $52.67

b. $105.82

c. $202.62

d. $1,691.4