$1.$ Heavy Metal Corporation is expected to generate the following free cash flows over the next five$$ years:$($Click on the following icon in order to copy its contents into a$$ spreadsheet.$)$

Year

$1$

$2$

$3$

$4$

$5$

FCF$($$ million$)$

$53\mathrm{.}2$

$66\mathrm{.}3$

$77\mathrm{.}6$

$76\mathrm{.}4$

$81\mathrm{.}3$

After$$ that, the free cash flows are expected to grow at the industry average of $3\mathrm{.}9\%$ per year. Using the discounted free cash flow model and a weighted average cost of capital of $14\mathrm{.}3\%$:

a$.$ Estimate the enterprise value of Heavy Metal.

b$.$ If Heavy Metal has no excess$$ cash, debt of $ $313$million$,$ and $44$ million shares$$ outstanding, estimate its share price.

$2.$ Suppose that in January $2006$ Kenneth Cole Productions had EPS of $ $1\mathrm{.}53$ and a book value of equity of $ $12\mathrm{.}37$ per share. Use the multiples approach to estimate$$ KCP$\text{'}$s value based on the data from comparable firms given in the following table.

P

E

Price Book

Enterprise Value Enterprise Value

Sales

EBITDA

Average

$15\mathrm{.}01$

$2\mathrm{.}84$

$1\mathrm{.}06$

$8\mathrm{.}49$

Maximum

$+51\%$

$+186\%$

$+106\%$

$+27\%$

Minimum

$-42\%$

$-61\%$

$-56\%$

$-22\%$

a$.$ Using the average$$ P$/$E multiple from the table$$ above, estimate$$ KCP$\text{'}$s share price.

b$.$ What range of share prices do you estimate based on the highest and lowest$$ P$/$E multiples in the table$$ above?

c$.$ Using the average price to book value multiple in the table$$ above, estimate$$ KCP$\text{'}$s share price.

d$.$ What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table$$ above?