Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

Yandie Izzo manages a dividend growth strategy for a large asset management firm. Izzo meets with her investment team to discuss potential investments in three companies: Company A, Company B, and Company C. Statements of cash flow for the three companies are presented in Exhibit 1.Exhibit 1. Statements of Cash Flow, Most Recent Fiscal Year End (Amounts in Millions of Dollars)
| Company A Company B | Company C |
| CashFlow from Operating Activities |
| Net Income | 4，844 | 1，212 | 15，409 |
| Adjustments |
| Depreciation | 500 | 288 | 3，746 |
| Other non-cash expenses | 1，000 |
| Changes in working capital |
| (Increase) Decrease accounts receivable | (452) | (150) | (536) |
| (Increase) Decrease inventories | (200) | (803) |
| Increase(Decrease) accounts payable | (210) | 100 | (3) |
| Increase(Decrease)other | current | 540 | 14 | 350 |
| liabilities |
| Net cash from operating act pi ies | 6，222 | 1，264 | 18，163 |


Cash Flow from Investing Activities
| (Purchase) Sale off xed assets | 2.379 | (1.000) | (3，463) |
| Net cash from investing a civi ties | 2，379 | (1.000) | (3.463) |


Cash Flow from Financing Activities
| Company ACompany BCompany C |
| Increase(Decrease) notes payable | 25 | 3000 | 1，238 |
| Increase(Decrease) long-term debt | (1，500) | (1.000) | (1.379) |
| Payment of common stock dividends | (1.000) | (237) | (15，000) |
| Net cash from financing act vi ties | (2.475) | 1，763 | (15，141) |
| Net change in cash and cash equivalents | 6，126 | 2，027 | (441) |
| Cash and equivalents at beginning of year | 50 | 100 | 3，000 |
| Cash and equivalents at end of year | 6，176 | 2，127 | 2，559 |


Supplemental Cash Flow Disclosures
| Interest | (353) | (50) | (552) |
| Income taxes | (1，605) | (648) | (3，787) |


Izzo’s team first discusses key characteristics of Company A. The company has a history of paying modest dividends relative to FCFE, has a stable capital structure, and is owned by a controlling investor.The team also considers the impact of Company A’s three non-cash transactions in the most recent year on its FCFE, including the following:● Transaction 1: A $900 million loss on a sale of equipment● Transaction 2: An impairment of intangibles of $400 million● Transaction 3: A $300 million reversal of a previously recorded restructuring chargeIn addition, Company A’s annual report indicates that the firm expects to incur additional non-cash charges related to restructuring over the next few years.To value the three companies’ shares, one team member suggests valuing the companies’ shares using net income as a proxy for FCFE. Another team member proposes forecasting FCFE using a sales-based methodology based on the following equation:FCFE = NI – (1 – DR)(FCInv – Dep) – (1 – DR)(WCInv)Izzo’s team ultimately decides to use actual free cash flow to value the three companies’ shares. Selected data and assumptions are provided in Exhibit 2.
| Exhibit 2.Supplemental Data and Valuation Assumptions |
| Company A Company B | Company C |
| Tax rate | 35% | 35% | 30% |
| Beta | 1.00 | 0.90 | 1.10 |
| Before-tax cost of debt | 6% | 7% | 6% |
| Target debt ratio | 50% | 30% | 40% |


Market data:Risk-free rate: 3%Market risk premium: 7%The team calculates the intrinsic value of Company B using a two-stage FCFE model. FCFE growth rates for the first four years are estimated at 10%, 9%, 8%, and 7%, respectively, before declining to a constant 6% starting in the fifth year.To calculate the intrinsic value of Company C’s equity, the team uses the FCFF approach assuming a single-stage model where FCFF is expected to grow at 5% indefinitely.
Based on Exhibit 1, using net income as a proxy for Company B’s FCFE would result in an intrinsic value that is:
Option A:lower than the intrinsic value if actual FCFE were used.
Option B:equal to the intrinsic value if actual FCFE were used.
Option C:higher than the intrinsic value if actual FCFE were used.

Answer: A