Answer: Under the free cash flow valuation​ model, free cash flows in future are projected.  These are discounted by the adjusted capital cost i.e. (debt and equity).
Therefore, the appropriate way to calculate the price of a share of a given company using the free cash flow valuation​ model is given as :
[tex]P_{0} = \frac{V_{0}+Cash_{0}-Debt{0}}{(Outstanding Share)_{0}}[/tex]
Here, the correct option is (a). i.e. [tex]P_{0} = \frac{V_{0}+Cash_{0}-Debt{0}}{(Outstanding Share)_{0}}[/tex]
