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.