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 4.5% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.7%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $280 million, and 36 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 $280 million, and 36 million shares outstanding, estimate its share price. The stock price per share will be $ (Round to the nearest cent.)
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 4.5% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.7%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $280 million, and 36 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 $280 million, and 36 million shares outstanding, estimate its share price. The stock price per share will be $ (Round to the nearest cent.)
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
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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 4.5% per
year. Using the discounted free cash flow model and a weighted average cost of capital of 14.7%:
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess cash, debt of $280 million, and 36 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 $280 million, and 36 million shares outstanding, estimate its share price.
The stock price per share will be $ (Round to the nearest cent.)
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