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Today is January 31, 2018. You forecast the following cash flows (in millions) for a firm: Cash flow from operations January 31, 2019 $4,822.32 January

Today is January 31, 2018. You forecast the following cash flows (in millions) for a firm:

Cash flow from operations

January 31, 2019

$4,822.32

January 31, 2020

$5,342.00

January 31, 2021

$4,525.11

Cash investment in operations

January 31, 2019

$800.44

January 31, 2020

$913.21

January 31, 2021

$874.14

In addition, you are given the following data:

Net debt

January 31, 2018

$342.11

and

Free cash flow growth after 2021

3.00%

Required return

10.00%

What is the equity value of the firm (in millions) using Discounted Cash Flow model? Hint: First, calculate the free cash flows and discount the free cash flows. Finally, subtract the net debt to obtain equity value.

A

$46,434.11

B

$48,111.02

C

$50,079.02

D

$52,515.77

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