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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Year FCF ($ million) 1 51.8 2 69.5
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Year FCF ($ million) 1 51.8 2 69.5 3 77.4 4 74.3 5 80.8 Thereafter, the free cash flows are expected to grow at the industry average of 4.4% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.7%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $314 million, and 42 million shares outstanding, estimate its share price. a. Estimate the enterprise value of Heavy Metal. The enterprise value will be $1 million. (Round to two decimal places.)
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