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:

Bilaterians

Multicellular organisms with bilateral symmetry during embryonic development.

Bat Wing Development

The biological and evolutionary processes that lead to the formation of the wing structure in bats, enabling flight.

Tetrapod Limbs

The limbs of vertebrates that evolved from the fins of early fish and are characterized by having four limbs or leg-like appendages.

Bmp2 Expression

The process of gene expression where BMP2 (Bone Morphogenetic Protein 2) is involved in the formation of bone and cartilage.