Calculate the enterprise value of heavy metal

Reference no: EM131980988

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)	54.2	68.2	77.5	75.8	81.3

Thereafter, the free cash flows are expected to grow at the industry average of 3.8% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.5% :

a. Estimate the enterprise value of Heavy Metal.

b. If Heavy Metal has no excess cash, debt of $294 million, and 37 million shares outstanding, estimate its share price.

Reference no: EM131980988

Questions Cloud

Calculate accounting break-even point : Calculate the accounting Break-even point. The tax rate is 40% and the WACC applicable to the project is 15%.

Interest on credit cards : Interest on Credit Cards. ?Eileen, who is currently paying ?$576 per year in finance charges to her credit card? company,

Which is the better way to pay-off the balance : Heather has a $6,500 balance on a credit card with a 14.5% APR. She wants to pay-off the balance, before buying her house, but she is only able to make a $250.

Disadvantages to deciding on sole proprietorship : Explain your rationale, to include advantages and/disadvantages to deciding on sole proprietorship, limited partnership, regular partnership, corporation.

Calculate the enterprise value of heavy metal : Estimate the enterprise value of Heavy Metal. If Heavy Metal has no excess cash, debt of $294 million, and 37 million shares outstanding.

Number of common shares outstanding for general electric : What are the number of common shares outstanding for general electric 2012?

What is the current intrinsic value of vandell stock : Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30%.

Compute the realized rate of return for investors : Compute the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price.

Bonds in order to sell the bonds-with-warrants at par : What coupon interest rate must be set on the bonds in order to sell the bonds-with-warrants at par?

User Account

All Pages