Question
Question: Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Year 1 2 3 4 5 FCF
Question:
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) 54.3 67.4 78.5 73.9 80.1
Thereafter, the free cash flows are expected to grow at the industry average of 3.7% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.5%:
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess cash, debt of $320 million, and 36 million shares outstanding, estimate its share price.
Please proper explain and do not copy from Chegg. Otherwise I have to report the answer.
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