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Heavy Metal Corporation is expected to generate the following free cash flows over the next three years: Year FCF ($ million) 1 19 2 41
Heavy Metal Corporation is expected to generate the following free cash flows over the next three years: Year FCF ($ million) 1 19 2 41 3 55 Thereafter, the free cash flows are expected to grow at the industry average of 4.3% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.1%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $293 million, and 42 million shares outstanding, estimate its share price. *** a. Estimate the enterprise value of Heavy Metal. The enterprise value will be $499.44 million. (Round to two decimal places.) b. If Heavy Metal has no excess cash, debt of $293 million, and 42 million shares outstanding, estimate its share price. The stock price per share will be $4.92. (Round to the nearest cent.)
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