VSK enterprises would like to acquire SPK Corp and is trying to determine the terminal value at year $2024$ using the DCF approach. VSK decided to use the cost of equity as the discount rate due to the higher level of risk. Here are the cash flows for SPK Corp.

$2020=10$m

$2021=13$m

$2022=16$m

$2023=20$m

$2024=25$m

After $2024,$ the cash flows of SPK are expected to grow at a constant growth rate of $5\%.$ Assume a discount rate of $12\%$

Calculate the terminal value.

A$)$ $$283$ million

B$)$ $$320$ million

C$)$ $$219$ million

D$)$ $$375$ million

Calculate the price that would be paid based on DCF valuation. In other words, calculate the value of the target firm.

A$)$ $$57\mathrm{.}58$ million

B$)$ $$46\mathrm{.}57$ million

C$)$ $$239\mathrm{.}25$ million

D$)$ $$270\mathrm{.}36$ million