Thompsons Inc. has forecasted that its free cash flow three years from now, FCF3, will be $32 million. After three years, free cash flow is expected to grow at a constant rate of 5%. If the WACC is 16%, what is the present value of Thompsons horizon value, V3?

a. $195.69 million

b. $218.43 million

c. $229.09 million

d. $305.45 million

Can you walk through the steps how to get A as the correct answer?