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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) | 54.2 | 69.8 | 79.1 | 76.1 | 82.4 |
Thereafter, the free cash flows are expected to grow at the industry average of 4.1% 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. b. If Heavy Metal has no excess cash, debt of$302 million, and45 million shares outstanding,estimate its share price.
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