Kedia Inc. forecasts a negative free cash flow for the coming year, FCF1 = -$10 million, but it expects positive numbers thereafter, with FCF2 = $34 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 14.0%, what is the firm's total corporate value, in millions? Do not round intermediate calculations.
A. $335.10
B. $275.00
C. $319.14
D. $289.47
E. $303.95
Answer: D
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