Please answer QUESTIONS A through D. Thanks.

Sora Industries has 66 million outstanding shares, $124 million in debt, $46 million in cash, and the following projected free cash flow for the next four years: 0 Year 1 2 3 4 Earnings and FCF Forecast ($ million) 433.0 1 Sales 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% (313.6) (384.8) 3 Cost of Goods Sold (345.7) (366.5) 4 Gross Profit 170.3 154.4 180.5 189.5 5 Selling, General, & Admin. 6 Depreciation (93.6) (103.2) (114.9) (109.4) (7.0) (9.0) (7.5) (9.5) 7 EBIT 59.6 62.1 53.8 65.2 (21.5) 8 Less: Income Tax at 40% (23.8) (24.8) (26.1) 7 5 Plus: Denraciation. 7.0 5 7 EBIT 59.6 65.2 53.8 62.1 (21.5) (24.8) 8 Less: Income Tax at 40% (23.8) (26.1) 9 Plus: Depreciation 10 Less: Capital Expenditures 7.0 7.5 9.0 9.5 (7.7) (10.0) (9.9) (10.4) 11 Less: Increase in NWC (6.3) (8.6) (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 4.7% rate beyond year four. If Sora's weighted average cost of capital is 13.0%, 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. If 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 selling, general, and administrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Assume no other expenses, except taxes, are affected.) d. Sora's net working capital needs were estimated to be 18% of sales (their current level in year zero). If Sora can reduce this requirement to 12% of sales starting in year 1, but all other assumptions are as in (a), what stock price do you estimate for Sora? (Hint: This change will have the largest impact on Sora's free cash flow in year 1.) HW Score: 27.27%, 3 of 11 pts Score: 0 of 1 pt 4 of 11 (6 complete) XP 10-8 (similar to) Question Help DEpiculalivii 7 EBIT 53.8 59.6 62.1 65.2 8 Less: Income Tax at 40% (21.5) (23.8) (24.8) (26.1) 9 Plus: Depreciation 10 Less: Capital Expenditures 7.0 7.5 9.0 9.5 (10.4) (7.7) (10.0) (9.9) (8.6) (5.6) 11 Less: Increase in NWC (6.3) (4.9) 25.3 12 Free Cash Flow 30.8 33.3 24.6 a. Suppose Sora's revenue and free cash flow are expected to grow at a 4.7% rate beyond year four. If Sora's weighted average cost of capital is 13.0%, 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. If 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 selling, general, and administrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Assume no other expenses, except taxes, are affected.) d. Sora's net working capital needs were estimated to be 18% of sales (their current level in year zero). If Sora can reduce this requirement to 12% of sales starting in year 1, but all other assumptions are as in (a), what stock price do you estimate for Sora? (Hint: This change will have the largest impact on Sora's free cash flow in year 1.) a. Suppose Sora's revenue and free cash flow are expected to grow at a 4.7% rate beyond year four. If Sora's weighted average cost of capital is 13.0%, what is the value of Sora stock based on this information? The stock price for this case is $. (Round to the nearest cent.) Sora Industries has 66 million outstanding shares, $124 million in debt, $46 million in cash, and the following projected free cash flow for the next four years: 0 Year 1 2 3 4 Earnings and FCF Forecast ($ million) 433.0 1 Sales 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% (313.6) (384.8) 3 Cost of Goods Sold (345.7) (366.5) 4 Gross Profit 170.3 154.4 180.5 189.5 5 Selling, General, & Admin. 6 Depreciation (93.6) (103.2) (114.9) (109.4) (7.0) (9.0) (7.5) (9.5) 7 EBIT 59.6 62.1 53.8 65.2 (21.5) 8 Less: Income Tax at 40% (23.8) (24.8) (26.1) 7 5 Plus: Denraciation. 7.0 5 7 EBIT 59.6 65.2 53.8 62.1 (21.5) (24.8) 8 Less: Income Tax at 40% (23.8) (26.1) 9 Plus: Depreciation 10 Less: Capital Expenditures 7.0 7.5 9.0 9.5 (7.7) (10.0) (9.9) (10.4) 11 Less: Increase in NWC (6.3) (8.6) (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 4.7% rate beyond year four. If Sora's weighted average cost of capital is 13.0%, 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. If 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 selling, general, and administrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Assume no other expenses, except taxes, are affected.) d. Sora's net working capital needs were estimated to be 18% of sales (their current level in year zero). If Sora can reduce this requirement to 12% of sales starting in year 1, but all other assumptions are as in (a), what stock price do you estimate for Sora? (Hint: This change will have the largest impact on Sora's free cash flow in year 1.) HW Score: 27.27%, 3 of 11 pts Score: 0 of 1 pt 4 of 11 (6 complete) XP 10-8 (similar to) Question Help DEpiculalivii 7 EBIT 53.8 59.6 62.1 65.2 8 Less: Income Tax at 40% (21.5) (23.8) (24.8) (26.1) 9 Plus: Depreciation 10 Less: Capital Expenditures 7.0 7.5 9.0 9.5 (10.4) (7.7) (10.0) (9.9) (8.6) (5.6) 11 Less: Increase in NWC (6.3) (4.9) 25.3 12 Free Cash Flow 30.8 33.3 24.6 a. Suppose Sora's revenue and free cash flow are expected to grow at a 4.7% rate beyond year four. If Sora's weighted average cost of capital is 13.0%, 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. If 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 selling, general, and administrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Assume no other expenses, except taxes, are affected.) d. Sora's net working capital needs were estimated to be 18% of sales (their current level in year zero). If Sora can reduce this requirement to 12% of sales starting in year 1, but all other assumptions are as in (a), what stock price do you estimate for Sora? (Hint: This change will have the largest impact on Sora's free cash flow in year 1.) a. Suppose Sora's revenue and free cash flow are expected to grow at a 4.7% rate beyond year four. If Sora's weighted average cost of capital is 13.0%, what is the value of Sora stock based on this information? The stock price for this case is $. (Round to the nearest cent.)