Conundrum Mining Is Expected to Generate the Above Free Cash

question 24

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 12% and Conundrum has cash of $80 million,debt of $60 million,and 30 million shares outstanding,what is Conundrum's expected current share price?

• A)$10.84
• B)$13.72
• C)$16.16
• D)$16.25

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Definitions:

Respiratory Surfaces

The parts of organisms where gas exchange between the external environment and the internal tissues occurs, typically thin, moist, and highly vascularized for efficient diffusion of gases.

Moist

Slightly wet or damp, often used to describe environments or surfaces.

Choking

The blockage of the airway by a foreign object, leading to a severe reduction in breathing or inability to breathe.

Blockage

The obstruction of passage through something, such as a pipe or a blood vessel.