An analyst has put together the following spreadsheet to estimate the intrinsic value of the stock of Company Alpha (in millions of dollars):

t = 1 t = 2 t = 3

Sales $3,000 $3,600 $4,500

EBIT (1-t) 1000 1200 1700

Net investment in operating capital* 850 1050 1550

*Net investment in operating capital = Capital expenditures + Changes in net operating capital Depreciation.

After Year 3 (t = 3), assume that the companys free cash flow will grow at a stable rate. However, you are uncertain what the stable growth rate will be. You know comparable firms have P/E multiple of 11 and you expect the same for your firm in 3 years. The projected EPS in three years is $3. The companys cost of capital equals 8%. The company does not have any debt outstanding. What is the value of the firm (at period 0, today) if company has 30 million shares outstanding? (Note: all numbers are in nominal terms and ignore the fact that depreciation is risk free. Cash flows occur at the end of the year)

Group of answer choices

$1,172 million

$1,192 million

$1,154 million

$1,181 million

$1,163 million