Lex Corp. is expected to generate a free cash flow (FCF) of $885.00 million this year (FCF₁ = $885.00 million), and the FCF is expected to grow at a rate of 23.80% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.54% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Lex Corp.’s weighted average cost of capital (WACC) is 10.62%, what is the current total firm value of Lex Corp.? (Note: Round all intermediate calculations to two decimal places.)
$22,533.74 million
$2,697.44 million
$17,351.56 million
$20,821.87 million