Heavy metal corporation is expected to generate the, Ask an Expert

Finance

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)

54.1 66.7 78.4 74.8 80.2

Thereafter, the free cash flows are expected to grow at the industry average of 3.7 % per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.7 % : a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $ 306 million, and 40 million shares outstanding, estimate its share price.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92861950

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