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Please help explain step by step please Sora Industries has 62 milion outstanding shaves, $125 milion in debt, $48 million in cash, and the following
Please help explain step by step please
Sora Industries has 62 milion outstanding shaves, $125 milion in debt, $48 million in cash, and the following projected free cash flow for the next four yeari a. Suppose Sore's reveruet and free cash tow are expected to grow at a 4.3% rate boyond year four. If Sora's weighted avorage cost of capital is 11.0%, what is ithe vatue of Sora sfock based on this intomasion? b. Sora's cost of goode 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 stocks vatue change? e. fietum to the assamploos of part (a) and suppose Sora can maintain its cost of goods sold at 67% of sales. However, the firm reduces its selling, generat, and administrative axpenses from 20% of salou to 10% of soles. What stock prioe would you estimate now? (Assume no other expenses, except taxes, are affected) are as in (a), what ntock proe do you estimate for Sora? (Hint This change with have the largest impact on Sora's free cash flow in year 1. ) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Step by Step Solution
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