Question

Heavy Metal Corporation is expected to generate the following free cash flows over the next five​ years: LOADING.... ​Thereafter, the free cash flows are expected to grow at the industry average of per year. Using the discounted free cash flow model and a weighted average cost of capital of ​: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess​ cash, debt of ​million, and million shares​ outstanding, estimate its share price.

Answer 1

Answer:

Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: (Click on the following icon in order to copy its contents into a spreadsheet.) 2 3 Year FCF (5 million) 53. 6 66.2 78. 6 4 75. 3 . 5 82.5 After that, the free cash flows are expected to grow at the industry average of 4.4% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.6% a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $288 million, and 42 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 $288 million, and 42 million shares outstanding, estimate its share price. price. The stock price per share will be $ (Round to two decimal places.)

Explanation: