Question
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years year 1 2 3 4 5 FCF ($
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years
year | 1 | 2 | 3 | 4 | 5 |
FCF ($ million) | 53.4 | 69.6 | 76.7 | 76.8 | 83.3 |
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 13.2 %
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess cash, debt of $ 300 million, and 45 a million shares outstanding, estimate its share price.
a. Estimate the enterprise value of Heavy Metal.
The enterprise value will be $ million. (Round to two decimal places.)
b. If Heavy Metal has no excess cash, debt of million, and million shares outstanding, estimate its share price.The stock price per share will be
$ (Round to the nearest cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started