Valuation of the target company is a critical aspect of a merger transaction. Different methods are used in acquisition, valuations such as the corporate valuation method, the adjusted present value approach, the free cash flow to equity approach, and so on.

Eades Logistics Corp. is expected to generate a free cash flow (FCF) of $228.00 million this year (FCF1FCF1= $228.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF2FCF2 and FCF3FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF4FCF4). Eades Logistics Corp.'s weighted average cost of capital (WACC) is 6.30%.

Use corporate valuation method to complete your analysis.

	You would discount the FCFs using the in your valuation.
	The horizon value of Eades Logistics Corp.'s cash flows is . (Note: Round your intermediate calculations to two decimal places.)
	The current total firm value of Eades Logistics Corp. operations is . (Note: Do not round your intermediate calculations.)

If Eades Logistics Corp. carries $5,443 million of debt before the merger, and the firm has no nonoperating assets or preferred stock, the value of equity of Eades Logistics Corp. to Ziffy Corp. will be

$1,664.77 million.

$3,129.21 million.

$5,443.77 million.

$1,814.77 million.