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Please answer all parts thank you! Sora industries tas 62 million outetanding shares, $121 milion in debt, $58 million in cash, and the following projected
Please answer all parts thank you!
Sora industries tas 62 million outetanding shares, $121 milion in debt, $58 million in cash, and the following projected froe cash fow for the next four years: a. Suppose Sora's revenue and tree cash fow are expected to grow at a 4.4% mate bejond year four. "Soreis wighted averoge cost of capital is 12.0%, what is the value of Sora slock based on this information? b. Sora's cost of goods sold was assumed to be 67% of sales. If its cost of poods sold is actualy 70% of sales, how would the estimate of the stock's value change? c. Retum to the aswumptions of part (a) and suppose Sora can maintain its cost of goods sold at 67% of sales. Howover, the firm reduces is selling. general, and adminatrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Assume no other expenses, except taxes, aro alfocted.) d. Sora's net working capital needs were estimated to be 18% of sales (ther current level in year zero). If Sora can reduce this requirement to 12% of sales starting in year 1 , but all other a.'Suppose Sora's revenue and free cash flow are expected to grow at a 4.4\% rate beyond year four. If Sora's weighted average cast of capital is 12.0%, what is the value of Soca stock based on this information? The slock price for this case is ? (Round to the nearest cent) (Click on the following icon in order to copy its contents into a spreadsheet.) Step by Step Solution
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