Answer: $5,035,068.49
Step-by-step explanation:
Terminal value is calculated based on the last cashflow and the growth rate in perpetuity.
The Gordon Growth Model is best used here:
= Free Cash Flow₄ / (WACC - Growth rate)
= (FCF₃ * (1 + growth rate) ) / (WACC -Growth rate)
= (360,000 * (1 + 2.10%)) / (9.40% - 2.10%)
= 367,560 / 7.3%
= $5,035,068.49