We are currently at the end of year "t". You performed a thorough financial analysis of XYZ and forecast the following Free Cash Flows (FCF):

Year t+1: 352 million USD

Year t+2: 385 million USD

Year t+3: 407 million USD

From year t+3 onward, you expect the FCFs to grow at a constant yearly rate of 4%.

Through your analysis, you also determined that the appropriate Weighted Average Cost of Capital (WACC) for XYZ was 11%.

Finally, you know that XYZ has 1000 million USD in debt and 100 million shares outstanding.

1)What is the terminal value (in Year t+3)?

2)Suppose the correct Terminal Value is 6000 million USD (i.e. discard your answer to the previous question), what is the price of 1 share of XYZ using the Discounted Cash Flow (DCF) valuation method?

3) Suppose you observe that a share of XYZ is traded at a price of 35 USD on an exchange.Based on your own estimate of the price of a share of XYZ, would you say that the company is overvalued or undervalued by the market (use the price for one share that you found in the previous question to answer this question)?