Youve been hired by the firm of JB and Makya, Inc. as an analyst. They would like you to utilize the DCF model using free cash flow to equity in determining the stock price of Purina. You estimate the following free cash flows to equity for Purina. After the third year, you expect the growth rate to be 5%. Purina has 5 million shares of stock outstanding. Assuming an 8% required return, what is the intrinsic value of Purinas stock?

CF1 = $15 million

CF2 = $25 million

CF3 = $32 million

answer choices

$189.96

$132.46

$105.86

$141.63

$89.67