1 . Heavy Metal Corporation is expected to generate the following free cash flows over the next fiveyears:

Year - FCF ($million)

1 - 54.4

2 - 66.8

3 - 76.1

4 - 73.7

5 - 81.4

Thereafter, the free cash flows are expected to grow at the industry average of 3.5% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.9%:

a.Estimate the enterprise value of Heavy Metal.

b.If Heavy Metal has no excesscash, debt of $300 million, and 41 million sharesoutstanding, estimate its share price.

a.Estimate the enterprise value of Heavy Metal.

The enterprise value will be _____ $ million.(Round to two decimalplaces)

2.You notice thatCoca-Cola has a stock price of $41.84 and EPS of $1.82. Its competitor PepsiCo has EPS of $3.76. But, JonesSoda, a small batchSeattle-based soda producer has aP/E ratio of 35.7. Based on thisinformation, what is one estimate of the value of a share of PepsiCostock?

One share of PepsiCo stock is valued at $___________