Year 1 2 3 4
Free cash flow $12 million $18 million $22 million $26 million
Australia Mining (AM) is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 12%, what is AM's current value?
a.$305 million
b.$248 million
c.$215 million
d.$468 million