Computation of enterprise value and stock price

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Reference no: EM1312694

Rock Hard Corp expects the following free cash flows in millions over the next 5 years

1 150

2 200

3 180

4 210

5 300

After the fifth year, free cash flows are expected to grow at 5% per year. Using the discounted free cash flow model and a weighted average cost of capital if 15%

1. Estimate the enterprise value of Rock Hard

2. Rock hard has excess $cash of 20 million, debt of $550 million, and 80 million shares outstanding, estimate its stock price.

Reference no: EM1312694

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