21.

The following data apply to the next three questions Delta Industries has 50 million outstanding shares, $100 million in debt, $40 million in cash, and the following projected free cash flow to the firm (FCFF) for the next four years: 0 1 2 3 4 433.0 Year Earnings and FCF Forecast ($ milliona) 1 Sales 2 Growth versus Prior Year 3 Cost of Goods Sold 4 Gross Profit 5 Selling, General and Administrative 6 Depreciation 7 EBIT & Less: Income Tax at 40% 9 Plus: Depreciation 10 Lens: Capital Expenditures 11 Less: Increase in NWC 12 Free Cash Flow 468.0 8.1% 1313.61 1544 1936) (701 638 (215) 70 1771 16.31 25.3 5160 10.3% 1345.78 1703 1103.2) 175 696 23.8 75 (10.01 18.61 5470 60% (306 58 180,5 (100 41 03.01 021 24.01 90 5443 50% (39489 1895 (11491 . 852 26.11 9.5 110 4 64.92 333 156) 30.8 24.6 Suppose Delta's revenue and free cash flow are expected to grow at a 5% rate beyond year 4. if Delta's weighted average cost of capital (WACC) is 12%, 21 of 24 What is your estimate to the current share price of Delta's stock based on this information? O a. $5.98 O b. $6.85 O c. $7.21 od $7.65 e. None of the above Unsure