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 3.7% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.9%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $293 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.)
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 3.7% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.9%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $293 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.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A and B please
Transcribed Image Text:Data table
(Click on the following icon g in order to copy its contents into a spreadsheet.)
Year
1
2
3
4
FCF ($ million)
54.9
67.5
78.3
76.5
82.3
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 3.7% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.9%:
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess cash, debt of $293 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.)
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