Conundrum Mining Is Expected to Generate the Above Free Cash

question 23

Multiple Choice

Conundrum Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 11% and Conundrum has cash of $85 million, debt of $65 million, and 30 million shares outstanding, what is Conundrum's expected current share price?

• A)$12.61
• B)$16.40
• C)$20.18
• D)$20.81

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Definitions:

Substance Abuse

The adverse or perilous engagement with psychoactive substances, encompassing both alcohol and banned drugs.

Treatment Costs

The financial expenditures associated with medical treatments, including the price of medications, therapy sessions, and other healthcare services.

Cognitive-behavioral Therapies

A group of psychotherapeutic treatments that address dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic process.

Behavioral Conditioning

A learning process that involves developing or altering behaviors through a system of rewards or punishments.