15) Sora Industries currently has 60 million outstanding shares, $120 million in debt and $40 million in cash. Sales in the last financial year were $433. They are projected to grow at 8.1% next year, 10.3% in the second year, and 6% in the third year. From the fourth year onwards, sales will grow at 5% per year. Furthermore, you are given that in the last financial year, Sora's i) cost of goods sold was 67% of sales, ii) selling, general and administrative expenses were 20% of sales, iii) depreciation was 1.5% of sales, iv) gross fixed assets were 22.5% of sales, and v) NWC was 18% of sales. Assuming these ratios remain constant forever, the tax rate for the firm is 40%, and the WACC is 10%:

a. What is the stock price of Sora Industries?

b. Sora's cost of goods sold was assumed to be 67% of sales. If its cost of goods sold is actually

70% of sales, how would the estimate of the stock's value change?

c. Sora's net working capital needs were estimated to be 18% of sales (their current level in year 0).

If Sora can reduce this requirement to 12% of sales starting in year 1, but all other assumptions

remain as in part (a), what stock price do you estimate for Sora?