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) 51.1 69.2 78.8 76.4 80.1 After that, the free cash flows are expected to grow at the industry average of 3.9% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.5%: Estimate the enterprise value of Heavy Metal. (Round to two decimalplaces.) If Heavy Metal has no excess cash, debt of $285 million, and 43 million shares outstanding, estimate its share price. (Round to two decimalplaces.)
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: Year 1 2 3 4 5 FCF ($ million) 51.1 69.2 78.8 76.4 80.1 After that, the free cash flows are expected to grow at the industry average of 3.9% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.5%: Estimate the enterprise value of Heavy Metal. (Round to two decimalplaces.) If Heavy Metal has no excess cash, debt of $285 million, and 43 million shares outstanding, estimate its share price. (Round to two decimalplaces.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years:
Year 1 2 3 4 5
FCF ($ million) 51.1 69.2 78.8 76.4 80.1
After that, the free cash flows are expected to grow at the industry average of 3.9% per year. Using the discounted
- Estimate the enterprise value of Heavy Metal. (Round to two decimalplaces.)
- If Heavy Metal has no excess cash, debt of $285 million, and 43 million shares outstanding, estimate its share price. (Round to two decimalplaces.)
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