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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) | 53.8 | 68.8 | 78.1 | 73.8 | 82.7 |
.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 14.4%:
a. Estimate the enterprise value of Heavy Metal. (Round to 2 decimal places)
b. If Heavy Metal has no excess cash, debt of $317 million, and 44 million shares outstanding, estimate its share price. (Round to the nearest cent)
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