On December 31st, 2015, the company had 50M shares outstanding. In both 2015 & 2106, the company had an effective tax rate of 25.0% and an interest expense of $100. In 2016, the company repurchased $20M shares at $50.00 per share and did not sell any assets. On December 31st, 2016, the company traded at $50.00 per share. All data in the table below, including shares outstanding, is in USD millions. HINT: In your calculations, be careful when choosing to include cash, marketable securities, and the current portion of long term debt.

In 2016, assume the FCFF is $300 while the FCFE is $150. All cash flows (i.e. CFO, FCFF, & FCFE) will grow at 2.0% in perpetuity; the appropriate WACC is 8.0% and the cost of equity is 14.0%. How much would you pay for all of companys stock?

A. $1250M

B. $1275M

C. $1875M

D. $2500M

E. $2550M

Dec-15 500 300 100 Dec-16 600 375 200 Operating Income Net Income Cash Marketable Securities Accounts Payable Accounts Receivable Current Portion of LT Debt Inventory Gross PPE Net PPE Long Tem Debt Dividends Shares Issued (Repurchased) 80 50 80 80 1350 950 550 25 50 80 60 1100 750 600 15 0 20