Q10 Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: (Click on the following icon in order to copy its contents into a spreadsheet.)151.7267.1379.4475.9YearFCF ($ millions)583.9After that, the free cash flows are expected to grow at the industry average of 3.5% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.6%a. Estimate the enterprise value of Heavy Metal.b. If Heavy Metal has no excess cash, debt of $312 million, and 42 million shares outstanding, estimate its share price.a. Estimate the enterprise value of Heavy Metal.The enterprise value will be $ million. (Round to two decimal places.)b. If Heavy Metal has no excess cash, debt of $312 million, and 42 million shares outstanding, estimate its share price.The stock price per share will be $(Round to two decimal places.)

Enterprise value refers to the value of the stock of the company by adding up the debt value and…

Answered: Heavy Metal Corporation is expected to…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter21: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 9P

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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: (Click on the following icon in order to copy its contents into a spreadsheet.) 1 54.6 2 67.4 3 76.9 4 74.8 Year FCF ($ millions) 5 80.7 After that, the free cash flows are expected to grow at the industry average of 3.4% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.7%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $316 million, and 41 million shares outstanding, estimate its share price. a. Estimate the enterprise value of Heavy Metal. The enterprise value will be $ million. (Round to two decimal places.) b. If Heavy Metal has no excess cash, debt of $316 million, and 41 million shares outstanding, estimate its share price. The stock price per share will be $ (Round to two decimal places.)
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: (Click on the following icon in order to copy its contents into a spreadsheet.) Year FCF ($ million) 1 52.4 2 67.9 3 79.3 4 73.1 5 81.9 After that, the free cash flows are expected to grow at the industry average of 4.1% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14.7%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $320 million, and 44 million shares outstanding, estimate its share price.
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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: (Click on the following icon in order to copy its contents into a spreadsheet.) Year FCF ($ millions) 1 54.4 2 66.8 3 77.2 4 73.5 5 80.7 After that, the free cash flows are expected to grow at the industry average of 3.5% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.8%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $315 million, and 37 million shares outstanding, estimate its share price.
UBTECH Robotics is expected to generate the following free cash flows over the next fiveyears. After which, the free cash flows are expected to grow at the industry average of 3% peryear. Using the discounted free cash flow model and the weighted average cost of capital of11%UBTECH Robotics FCF Forecast ($ Millions)Year199920002001200220032004FCF (Amount in Millions)$55$45$89$102$84$87a. Estimate the enterprise value (V0) of UBTECH Robotics.b. If UBTECH Robotics has excess cash of $5.6 Billion, a debt of $800 Million and 50 Millionshares outstanding, estimate its share price (P0).
UBTECH Robotics is expected to generate the following free cash flows over the next fiveyears. After which, the free cash flows are expected to grow at the industry average of 3% peryear. Using the discounted free cash flow model and the weighted average cost of capital of11%UBTECH Robotics FCF Forecast ($ Millions)Year 1999 2000 2001 2002 2003 2004FCF (Amount in Millions)$55 $45 $89 $102 $84 $87a. Estimate the enterprise value (V0) of UBTECH Robotics.b. If UBTECH Robotics has excess cash of $5.6 Billion, a debt of $800 Million and 50 Millionshares outstanding, estimate its share price (P0).
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Dozier Corporation is a fast-growing supplier of office products. Analyst project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7 percent rate. WACC= 13 percent. Year : 0 1 2 3 FCF(RM Millions): NA - RM 20 RM 30 RM 40 (i) What is Dozier’s terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3) (ii) What is the firm’s value today? (iii) Suppose Dozier has RM 100 million of debt and 10 million shares of stock outstanding. What is your estimate of the price per share?
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Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant 6% rate. Dantzler's WACC is 10%. Year $ 0 1 $ 2 FCF (S millions) - $22 a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million 3 $30 $52 b. What is the firm's market value today? Assume that Dantzler has zero nonoperating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million c. Suppose Dantzler has $188.80 million of debt and 23 million shares of stock outstanding. What is your estimate of…
Fauji Fertilizer Corporation expects to generate following free cashflows in coming 5 years. Year 1 2 3 4 5 FCF (Rs. Million) 51 70 77 72 80 After this time period, the free cashflows will grow constantly at 3% per year. The firm’s cost of capital is 13%. Using the discounted free cashflow model, calculate the following. What is the enterprise value of Fauji Fertilizer Ltd? If Fauji Fertilizer have access cash of Rs. 32 million, debt of Rs. 280 million, and the 40 million shares outstanding and trading in the market, what should be the expected share price of Fauji Fertilizer? c. Suppose that the stocks of Fauji Fertilizer are being sold in the market at Rs. 12 per share. Will you buy that stock? why or why not?
Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 4% rate. Dantzler's WACC is 12%. Year 0 1 2 3 FCF ($ millions) $-11 $15 $56 What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places.$ million What is the firm's market value today? Assume that Dantzler has zero nonoperating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places.$ million Suppose Dantzler has $95.80 million of debt and 36 million shares of…

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