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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) | 53.5 | 67.6 | 79.1 | 74.7 | 80.1 |
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
$287
million, and
43
million shares outstanding, estimate its share price.
a.Estimate the enterprise value of Heavy Metal.
The enterprise value will be
$nothing
million.(Round to two decimal places.)
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