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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years:(Click on the following icon in order to copy

Heavy Metal Corporation is expected to generate the following free cash flows over the next five years:(Click on the following icon

in order to copy its contents into a spreadsheet.)

Year

1

2

3

4

5

FCF ($ million)

51.1

66.7

77.1

74.7

83.8

After that, the free cash flows are expected to grow at the industry average of

3.5%

per year. Using the discounted free cash flow model and a weighted average cost of capital of

13.1%:

a. Estimate the enterprise value of Heavy Metal.

b. If Heavy Metal has no excess cash, debt of

$290

million, and

38

million shares outstanding, estimate its share price.

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