Heavy Metal Corporation is expected to generate the following free cash flows over the next five years:
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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years:
Year 1 2 3 4 5 FCF ($ millions) 52.2 68.7 77.2 75.6 80.5 After then, the free cash flows are expected to grow at the industry average of 4.1% per year.
Using the discounted free cash flow model and a weighted average cost of capital of 14.9%:
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess cash, debt of $306 million, and 42 million shares outstanding, estimate its share price.
AppendixLO1
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Related Book For
Corporate Finance The Core
ISBN: 9781292431611
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
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