Use information for Firm Y below for the problem.

Figures in millions

_____________________________________________________________________________

2020 2021E 2022E

_____________________________________________________________________________

Firm Ys free cash flow (FCF) $200 $214

Total value of debt $300

Number of shares outstanding = 30

_____________________________________________________________________________

The capital structure of Firm Y consists of debt and equity. Firm Y has no preferred stock. The firms required rate of return (or firms weighted average cost of capital) is 14 percent. Assume that free cash flows grow at a constant rate of 5 percent a year forever after 2022. What is the value of Firm Ys stock per share in 2020 using the constant growth model? A) $65.37 B) $74.34 C) $75.37 D) $84.56