ABC Corp. is a company that has been experiencing steady growth in its free cash flows (FCF). Analysts are interested in valuing the company using the Free Cash Flow to Firm (FCFF) method. The firm expects its free cash flow to be $1 million next year and grow at a rate of 5% indefinitely thereafter. If the weighted average cost of capital (WACC) is estimated to be 10%, what is the intrinsic value of ABC Corp. using the FCFF model?

Use the Gordon Growth Model formula for valuation:

Intrinsic Value = FCFF / (WACC - Growth Rate)