Sora Industries has 60 million outstanding shares, $124 million in debt, $43 million in cash, and the following projected free cash flow for the next four years: a. Suppose Sora's revenue and free cash flow are expected to grow at a 4.5% rate beyond year four. If Sora's weighted average cost of capital is 11.0%, 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 4.5% rate beyond year four. If Sora's weighted average cost of capital is 11.0%, what is the value of Sora stock based on this information? The stock price for this case is $ (Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 1 Year 0 1 2 3 4 2 Earnings and FCF Forecast ($ million) 3 Sales 4 Growth Versus Prior Year 5 Cost of Goods Sold 6 Gross Profit 7 Selling, General, and Administrative 8 Depreciation 9 EBIT 10 Less: Income Tax at 25% 11 Plus: Depreciation 12 Less: Capital Expenditures 13 Less: Increase in NWC 14 Free Cash Flow 433.00 468.00 516.00 547.00 574.30 8.1% 10.3% 6.0% 5.0% (313.56) (345.72) (366.49) (384.78) 154.44 170.28 180.51 189.52 (93.60) (103.20) (109.40) (114.86) (7.00) (7.50) (9.00) (9.50) 65.16 (16.29) 53.84 59.58 62.11 (13.46) 7.00 (14.90) 7.50 9.00 (7.70) (10.00) (9.90) (6.30) (8.64) (5.58) 33.38 (15.53) 9.50 (10.40) 33.55 (4.91) 40.10 43.055