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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)

52.8

68.3

76.1

73.3

83.5

After that, 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 14.2%:

a. Estimate the enterprise value of Heavy Metal.

b. If Heavy Metal has no excess cash, debt of $289 million, and 37 million shares outstanding, estimate its share price.

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