Please show step by step. Thank you.

Answer:21,389,813

Sparklett's Spangles sells shiny spoons made of gold. Segal's hedge fund is making an offer and the board of directors have asked for your help. The firm has $2,279,230 in preferred equity and the market value of its outstanding debt equals $3,135,336. The WACC for this firm is estimated to be 9.90%. Management's forecast of FCFs is shown below; year 1 represents one year from today and so on. The company expects to grow at a 3.0% rate after Year 5. In today's dollars, What is the terminal value of this company? Round your answer to the nearest penny and enter it in the box below.

Period	Free Cash Flow
Year 1	$1,031,172
Year 2	$1,220,925
Year 3	$2,172,519
Year 4	$2,141,142
Year 5	$2,297,245

Answer:21,389,813

How:

Calculate the terminal value by

a. multiplying year 5 cash flow by 1+growth rate to get the next year's value

b. divide the next year's value by (cost of capital - growth rate) Note: use the decimal of the interest rates.

c. bring the value to the present by calculating the PV. In Excel =pv(rate,years,0,-FV) where the rate is the cost of capital, years is 5, 0 payment, and the FV is the negative of the value calculated in b.