Answer: constant-growth FCFE model.

In the two-stage free cash flow model to estimate equity value, the terminal value is determined using the constant-growth FCFE (Free Cash Flow to Equity) model. This approach assumes that after the high-growth period, the company will grow at a stable, constant rate indefinitely. Option B appears to be a duplicate of option A. Option C is incorrect because terminal value calculation requires the Gordon growth model formula: FCFE × (1 + g) / (r - g), not simply FCF divided by growth rate.

Author: LeetQuiz Editorial Team