Using the capitalized cash flow method (CCM), calculate the fair market value of 100 percent of the equity of a hypothetical company, given the following information: Current years reported free cash flow to equity = $1,400,000 Current years normalized free cash flow to equity = $1,800,000 Long-term interest-bearing debt = $2,000,000 Weighted average cost of capital = 15 percent Equity discount rate = 18 percent Long-term growth rate of FCFE = 5.5 percent

Select one:

a. 14.19

b. 15.19

c. 16.19

d. 17.19