(Use the Excel template. Today is December 31, 2021.)

Major Electric (ME) is thinking of selling one of its divisions. The division generated free cash flow (FCF) of $100m in 2021. ME expects FCF to be 8% larger in 2022 than in 2021 and 8% larger in 2023 than in 2022. Growth will slow to 4% in 2024 and in 2025. After 2025 ME expects FCF to grow 2% per year into perpetuity.

If investors expect a 5% annual return for investing in this division, what price should ME ask for the division today? (Enter $100m as 100.00, no $.)