Intrinsic Value Calculation using FCFF

ABC Corporation is a high-growth tech company that has recently gained significant market attention. Analysts project that ABC will generate free cash flows (FCF) of $500 million in the next year with a growth rate of 15% for the next five years. After this high-growth period, the company is expected to experience stable growth of 4% indefinitely. Assuming a discount rate of 10%, what is the intrinsic value of ABC Corporation's equity based on a Free Cash Flow to Firm (FCFF) approach?

To calculate the intrinsic value, you will need to first determine the present value of the free cash flows during the high-growth period and then calculate the terminal value using the Gordon Growth Model for the period beyond the five years.