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) | 51.551.5 | 68.768.7 | 77.977.9 | 73.573.5 | 83.883.8 | |
?(Click on the icon located on the? top-right corner of the data table in order to copy its contents into aspreadsheet.?) |
After? that, the free cash flows are expected to grow at the industry average of
3.6 %3.6%
per year. Using the discounted free cash flow model and a weighted average cost of capital of
13.3 %13.3%?:
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess? cash, debt of
$ 286$286
?million, and
4040
million shares? outstanding, estimate its share price.
a. Estimate the enterprise value of Heavy Metal.
The enterprise value will be
?$nothing
million. ? (Round to two decimal? places.)
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