Estimate the enterprise value of heavy metal

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Heavy Metal Corporation is expected to generate the following free cash flows over the next five? years:

Year

1

2

3

4

5

FCF? ($ millions)

54.1

67.1

77.6

76.2

83.3

?Thereafter, the free cash flows are expected to grow at the industry average of 3.6% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.3%?:

a. Estimate the enterprise value of Heavy Metal.

b. If Heavy Metal has no excess? cash, debt of $307?million, and 45 million shares? outstanding, estimate its share price.

Reference no: EM133056078

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