Estimate the enterprise value of heavy metal

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Reference no: EM131300442

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) 54.3 67.4 78.5 73.9 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 13.5%?:

a. Estimate the enterprise value of Heavy Metal.

b. If Heavy Metal has no excess? cash, debt of $320 ?million, and 36 million shares? outstanding, estimate its share price.

Reference no: EM131300442

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