Sora Industries has 61 million outstanding shares, $120 million in debt, $60 million in cash, and the following projected free cash flow for the next four years: Year Earnings and FCF Forecast ($ million) 1 Sales 2 Growth vs. Prior Year 3 Cost of Goods Sold 4 Gross Profit 5 Selling, General, & Admin. 6 Depreciation 7 EBIT 8 Less Income Tax at 40% 433.0468.0 516.0 547.0 6,0% 574.3 5 0% 81% 10.3% (3136) (345.7) (366.5) (3848) 189.5 154.4 170.3 180.5 (7.0) (7.5) (9.0) 62.1 (21.5) (23.8) (248) (936) (1032) 10 (1149) (95) 65.2 53.8 59.6 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 13 0%, what is the value of Sora stock based on this information? The stock price for this case is S (Round to the nearest cent) 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? The stock price for this case, when COGS increases, is s(Round to the nearest cent) 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 would you estimate now? (Assume no other expenses, except taxes, are affected) % of sales. What stock price The stock price for this case, when selling, general, and administrative costs decrease, is (Round to the nearest cent.) 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 deyou estimate for Sora? (Hint This change will have the largest impact on Sora's free cash flow in year 1.) The stock price for this case, when working capital needs are reduced, is s(Round to the nearest cent) ice 7 EBIT 65.2 (21.5) (23.8) (24.8) (26.1) 9.5 (7.7) (10.0) (9.9) (104) (4.9) 33.3 53.8 62.1 9.0 (6.3) (8.6) (5.6) 59.6 8 Less: Income Tax at 40% 9 Plus: Depreciation 7.0 7.5 10 Less: Capital Expenditures 11 Less: Increase in NWC 12 Free Cash Flow 25.3 24.6 30.8 Suppose Sora's revenue and free cash flow are expected to grow at a 45% rate beyond year four if Sora eighted average cost of capital is 13.0%, what is the value . S of Sora stock based on this information? ora'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 ora can maintain its cost of goods sold at 67% ofsales owever, the firm reduces its selling general and administrative expenses rom 20%of sales to 16% of sales what ould vou estimate now? (Assume no other exnenses excent taxes are affected) a. Suppose Sora's revenue and free cash flow are expected to grow at a 45% 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) 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? The stock price for this case, when COGS increases, is s(Round to the nearest cent) 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.) The stock price for this case, when selling, general, and administrative costs decrease, is cent (Round to the nearest 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.) The stock price for this case, when working capital needs are reduced, is s(Round to the nearest cent)