Gere Furniture Forecasts a Free Cash Flow of $40 Million

Gere Furniture forecasts a free cash flow of $40 million in Year 3, i.e., at t = 3, and it expects FCF to grow at a constant rate of 5% thereafter.If the weighted average cost of capital is 10% and the cost of equity is 15%, what is the horizon value, in millions at t = 3?

A) $840
B) $882
C) $926
D) $972
E) $1, 021