PLEASE SHOW ALL WORK

Beebo's Circus Supplies free cash flows are expected to be volatile during the next few years while the company undergoes a restructuring. Nonetheless, you forecast that FCF will be $40 million in Year 6, that is, FCF at t = 6 equals $40 million, and you expect the FCF growth rate to be a constant 6% beyond that point. If the weighted average cost of capital is 11% and the cost of equity is 13%, what is the horizon value of the firm's operations (in millions) at t = 6?

(ONLY 1 ANSWER IS CORRECT)

A - $800

B - $848

C - $606

D - $883

E - $757