please answer A B C & D
Sora Industries has 70 million outstanding shares, 5127 million in debt, $55 million in cash, and the following projected free cash flow for the next four years. Year 0 1 2 3 4 Earnings and FCF Forecast (5 million) 1 Sales 433.0 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 1544 170.3 180.5 189.5 5 Selling. General, & Admin (93.6) (103.2) (109.4) (1149) 6 Depreciation (70) 7.5) (9.0) (9.5) 7 EBIT 538 59.6 62.1 65.2 8 Less: income Tax at 40% (21.5) (23.8) (248) (26.1) 9 Plus: Depreciation 70 75 90 05 a. Suppose Sora's revenue and free cash flow are expected to grow at a 4.9% rate beyond year fourIf Sora's weighted average cost of capital is 10.0%, what is the value of Sora stock based on this information? The stock price for this case is $(Round to the nearest cent) Enter your answer in the answer box and then click Check Answer parts 3 remaining Clear All Check Awn LOSSA 14761 were optio VAM 144) 9 Plus: Depreciation 70 7.5 9.0 9.5 10 Less: Capital Expenditures (7.7) (10.0) (9.9) (10.4) 11 Less: Increase in NWC 16.3) (86) (5,6) (4.9) 12 Free Cash Flow 25.3 24.6 30.8 33.3 a. Suppose Sora's revenue and free cash flow are expected to grow at a 4.9% rate beyond year four. If Sora's weighted average cost of capital is 10.0%, what is the value of Sora stock based on this information? b. Sora's cost of goods sold was assumed to be 67% of sales of its cost of goods sold is actually 70% of sales, how would the estimate of the stock's value change? c. Return to the assumptions of part(a) and suppose Sora can maintain its cost of goods sold at 67% of sales. However, the firm reduces its seling, general, and administrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Asume no other expenses, except taxes, are affected) d. Soru's not working capital needs were estimated to be 10% of sales (their current level in your zero) Sora can reduce this requirement to 12% of sales starting in year 1 bulher sumption was in (a) what stock price do you estimate for Sora? int. This change will have the largest impact on Sora's free cash flow in year 1) Suppose Son's revenue and free cash flow are expected to grow 4. rate beyond year tout. If Sora's weighted average cost of capital is 100% What is the value of Sora stock based on this information? The stock price for this 3 (Round to the nearest cont.) m. Question ]
