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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 ($millions)

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

Year 1 2 3 4 5
FCF ($millions) 53 68 78 75 82

After then, the free cash flows are expected to grow at the industry average of 4% per year (continuation value). Using the discounted free cash flow model and a weighted average cost of capital of 14%, estimate the approximate share price for Heavy Metal if the firm has $50 million in excess cash, financial debt (short and long term) of $150 million, and 40 million shares outstanding. (Hint: Find the Enterprise Value).

A. $9.5

B. $11.5

C. $13.0

D. $15.5

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