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Sora Industries has 62 million outstanding shares, $126 million in debt, $44 million in cash, and the following projected free cash flow for the next
Sora Industries has 62 million outstanding shares, $126 million in debt, $44 million in cash, and the following projected free cash flow for the next four years: Year 0 1 2 3 4 Earnings and FCF Forecast ($ million) 1 Sales 433.0 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2) (109.4) (114.9) 6 Depreciation (7.0) (7.5) (9.0) (9.5) 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 7.0 7.5 9.0 9.5 a. Suppose Sora's revenue and free cash flow are expected to grow at a 5.3% 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.)
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