Question 8 10 pts 0 1 2 3 4 Year Eamings and FCF Forecast ($ millions) 1 Sales 2 Growth versus Prior Year 3 Cost of Goods Sold 4 Gross Profit 5 Selling, General, and Administrative 6 Depreciation 7 EBIT 8 Less: Income Tax at 40% 9 Plus: Depreciation 10 Less: Capital Expenditures 11 Less: Increase in NWC 12 Free Cash Flow 433.0 468.0 8.1% 1313.61 1544 193.6 170) 53.8 (215 70 1771 16.3 25.3 516.0 5420 574.3 10.3% 60% 5.0% 345.7 (366.5) 384.8) 170.3 180.5 189.5 (103.2) (109.4) (114.9 (75) 9.01 19.5 59.6 62.1 65.2 (23.81 (24.81 26.11 75 9.0 9.5 (10.01 19.9 (10.4) (8.61 5.6) 4.9 24.6 30.8 33.3 Suppose that you came up with the FCF's forecast for a company (for the next four years) you are valuing as shown in the table above (in $ millions). The company has a cash balance of $20 million, $50 million in debt, and 50 million shares outstanding. If you assume that free cash flows are expected to grow at a 3% rate beyond 4 and the weighted average cost of capital is 10% for this company, what is the value of the company's stock based on this information? $8.42 $6.59 $7.88 $9.54