The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 399 Weeks Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Problem1. Heavy Metal Corporation is expected to generate the following free cash flows over the next five years:
Year 1 2 3 4 5
FCF ($ millions) 53 68 78 75 82
After then, the free cash flows are expected to grow at the industry average of 4% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14%:
a. Estimate the enterprise value of Heavy Metal.Â
b. If Heavy Metal has no excess cash, debt of $300 million, and 40 million shares outstanding, estimates its share price.Â
Note:Â
1).Complete the corporate valuation problem, Free Cash Flow Valuation, in a Word and/or Excel document. Show the details of your own calculation and work in your answer to the problem.
2).Please don't copy and paste the solution from ©2011 Pearson Education, Inc. Publishing as Prentice Hall and Seminar 5 Corporate Finance Equivalence of APV, FTE, and WACC OR from any other one. You've to show your own work.
Hel-----------lo -----------Sir-----------/Ma-----------dam----------- Â----------- Th-----------ank----------- Yo-----------u f-----------or -----------usi-----------ng -----------our----------- we-----------bsi-----------te -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n. -----------Ple-----------ase----------- pi-----------ng -----------me -----------on -----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill-----------