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Estimate the enterprise value of heavy metal

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Reference no: EM133072424

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)

54.7

68.8

78.4

76.4

81.7

68.8

78.4

76.4

81.7

?Thereafter, the free cash flows are expected to grow at the industry average of 3.9 %

per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.2 %?:

a. Estimate the enterprise value of Heavy Metal.

b. If Heavy Metal has no excess? cash, debt of $ 307 ?million, and 38 million shares? outstanding, estimate its share price.

Reference no: EM133072424

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