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Heavy Metal Corporation is expected to generate the following free cash flows over the next five year Year 1 2 3 4 5 FCF ($
Heavy Metal Corporation is expected to generate the following free cash flows over the next five year
Year | 1 | 2 | 3 | 4 | 5 |
FCF ($ Million) | 52.3 | 67.1 | 79.8 | 73.5 | 80.5 |
Thereafter, the free cash flows are expected to grow at the industry average of 4.5% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.3%:
A) Estimate the enterprise value of Heavy Metal.
B) If Heavy Metal has no excess cash, debt of $300 million, and 36 million shares outstanding, estimate its share price.
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