Conundrum Mining Is Expected to Generate the Above Free Cash

question 5

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 6% 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 terminal enterprise value at year 4?

• A) $413.4 million
• B) $459.3 million
• C) $505.3 million
• D) $528.2 million

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Definitions:

Poverty Threshold

The essential level of earnings required to live a decent life in a certain country.

Wage Earner's

Individuals whose income is derived primarily from their employment salary or wages.

Family Composition

The makeup or structure of a family, including the number of members, their relationships to each other, and their roles within the family unit.

Mean Household Income

The average income per household within a specified geographic location, calculated by dividing the total income of all households by the number of households.