Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Thereafter, the free cash flows are expected to grow at the industry average of 4.3% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.1%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $301 million, and 45 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.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year FCF ($ million) 1 51.2 2 3 4 4 5 69.1 78.3 73.5 81.7 Print Done

Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
Question
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Thereafter, the free cash flows are expected to grow at the industry average of 4.3% per
year. Using the discounted free cash flow model and a weighted average cost of capital of 14.1%:
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess cash, debt of $301 million, and 45 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.)
Data table
(Click on the following icon in order to copy its contents into a spreadsheet.)
Year
FCF ($ million)
1
51.2
2
3 4 4
5
69.1
78.3
73.5
81.7
Print
Done
Transcribed Image Text:Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Thereafter, the free cash flows are expected to grow at the industry average of 4.3% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.1%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $301 million, and 45 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.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year FCF ($ million) 1 51.2 2 3 4 4 5 69.1 78.3 73.5 81.7 Print Done
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