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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Year 2 3 5 1 52.5 4 75.1
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Year 2 3 5 1 52.5 4 75.1 FCF (5 million) 68.5 76.4 81.1 Thereafter, the free cash flows are expected to grow at the industry average of 3.9% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.8%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $298 million, and 36 million shares outstanding, estimate its share price. a. Estimate the enterprise value of Heavy Metal. The enterprise value will be $ 619.82 million. (Round to two decimal places.) b. If Heavy Metal has no excess cash, debt of $298 million, and 36 million shares outstanding, estimate its share price. The stock price per share will be $ 8.94. (Round to the nearest cent.)
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