Year 1 2 3 4 5

Free Cash Flow $25 million $28 million $32 million $36 million $41 million

Home Industries is expected to generate the above free cash flows over the next five years, after which free cash flows are expected to grow at a rate of 4% per year. If the weighted average cost of capital is 10% and Home Industries has cash of $20 million, debt of $40 million, and 100 million shares outstanding, what is the expected current share price of Home Industries?

Select one:

a. $5.01

b. $5.21

c. $5.41

d. $5.61

e. $5.81