eavy Metal Corporation is expected to generate the following free cash flows over the next five years: After that, the free cash flows are expected to grow at the industry average of 4.3% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.3%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $291 million, and 35 million shares outstanding, estimate its share price.
eavy Metal Corporation is expected to generate the following free cash flows over the next five years: After that, the free cash flows are expected to grow at the industry average of 4.3% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.3%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $291 million, and 35 million shares outstanding, estimate its share price.
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:
After that, the free cash flows are expected to grow at the industry average of 4.3% per year. Using the discounted
a. Estimate the enterprise value of Heavy Metal.
b. If Heavy Metal has no excess cash, debt of $291 million, and 35 million shares outstanding, estimate its share price.
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