Estimate the enterprise value

Assignment Help Finance Basics
Reference no: EM1348717

Heavy Metal Corp. 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. Using the discounted free cash flow model and a weighted average cost of capital of 14%:
a) Estimate the enterprise value of Heavy Metal.
b) If heavy metal has no excess cash, debt of $300 million, and 40 million shares outstanding, estimate its share price.

 

Reference no: EM1348717

Questions Cloud

Explaining multiple mono-alphabetic substitution ciphers : Consider improved version of Vigenere cipher, where instead of using multiple shift ciphers, multiple mono-alphabetic substitution ciphers are used.
Supply and demand for lawyer salaries : The Wall Street Journal reported that recent law school graduates were having a very difficult time obtaining jobs in the legal profession.
Philosophies-classical or positivist : Which of the two philosophies (classical or positivist) do you believe explains criminal behavior in a much more complete manner?
Amount available to buy financial guarantee : How much money would the creator of the trust have available to pay for loan servicing and profits if the financial guarantee was purchased?
Estimate the enterprise value : Heavy Metal Corporation is expected to generate the following free cash flows over the next 5 years:
Illustrate what would be the pes-dollar exchange rate : Illustrate what would be the pes0-dollar exchange rate be if purchasing-power parity holds. If a monetary expansion caused all prices in Mexico to double.
How much work was done from a to b : Two point charges have a total charge of 515 µC. When placed 1.15 m apart, the force each exerts on the other is 24.4 N and is repulsive. What is the charge on each.
Range of activity for deciding cost behaviour : Why is it necessary for a company to specify a relevant range of activity when making assumptions about cost behavior?
Explain why how we do anything means everything : Explain Why How We Do Anything Means Everything by Dov Seidman and The Future of Management by Gary Hamel

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe analysis of the intercompany financials

Describe Analysis of the intercompany financials with liquidity ratios and how the two companies are doing and what they could do to improve themselves

  Types of risks faced by investors in bonds

In brief explain the types of risks faced by investors in domestic bonds? Also point out the additonal risks associated with nondomestic bonds. Describe the differece between Stocks and Bonds and which one Corporations use most to raise capital.

  Determine correct statement

Today, you can get either 121 Canadian dollars or 1,288 Mexican pesos for 100 United State dollars. Last year, 100 United State dollars was worth 115 Canadian dollars or 1,291 Mexican pesos.

  Calculate the present values of investment using future

Calculate the present values of investment using future values investments returns

  Explain evaluation of investment proposal by profitability

Explain Evaluation of Investment proposal through Profitability Index and Rank the proposals in terms of preference using the project profitability index

  Determining firm-s expected free cash flow to equity

Determine the firm’s expected free cash flow to equity (FCFE) per share next year under these suppositions?

  Explain effect of dividend policy and size of capital budget

Explain Effect of Dividend policy and Size of capital budget on WACC and How might dividend policy affect the WACC

  Cost of capital-interest compounding periods

Would you rather have a savings account that pays 5% interest compounded semi-annually or one that pays 5% interest compound daily? Explain.

  Computation of net present value

Computation of net present value and what is the NPV of this investment

  Discusses the principles of financial accounting

Write a paper that discusses the principles of financial accounting. No references or specific style is required.

  Mergers and acquisition-sample question

Describe your views on mergers and acquisitions (M&As). Analyze the related issues and implications both from perspective of managers and investors.

  Defined benefit pension plan

Kenny's Aquatics, Inc. sponsors both a profit sharing plan and a defined benefit pension plan.  If Kenny's Aquatics would also like to contribute the maximum to the profit sharing plan, how much can they contribute?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd