When valuing a business the horizon value is added to the final year cash flow. What does this mean?

Select one:

a.

The final year (nth year) FCF is grown by (1 + g) then divided by (WACC g) - giving the horizon value, which is then added to the final year FCF

b.

The second last year (n-1 year) FCF is grown by (1 + g) then divided by (WACC - g) giving the horizon value, which is then added to the final year FCF

c.

The final year (nth year) FCF is divided by (WACC g) - giving horizon value, which is then added to the final year FCF

d.

Running the cashflows at a pre-defined growth rate out to infinity so that the perpetuity formula can be applied

e.

None of the options are correct