A company proposes to value itself based on the net present value of estimated future cash flows.

A company proposes to value itself based on the net present value of estimated future cash flows.

Relevant data:

• The cash flow for the next three years is expected to be £100 million each year

• The cash flow after year 3 will grow at 2% to perpetuity

• The cost of capital is 12%

The value of the company to the nearest $ million is:
A . $966 million
B . $1,260 million
C . $889 million
D . $834 million