Estimate the enterprise value of heavy metal

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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) 52.1 66.4 79.4 76.1 81.7 Thereafter, the free cash flows are expected to grow at the industry average 3.8% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.9%?:

a. Estimate the enterprise value of Heavy Metal.

b. If Heavy Metal has no excess cash, debt of $290 million, and 44 million shares outstanding, estimate its share price.

a. Estimate the enterprise value of Heavy Metal. The enterprise value will be $___ million. (Round to two decimal places.)

b. If Heavy Metal has no excess cash, debt of $290 million, and 44 million shares? outstanding, estimate its share price.

The stock price per share will be $____. (Round to the nearest cent.)

 

Reference no: EM131979685

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