Sora Industries has 63 million outstanding shares, $130 million in debt, $55 million in cash, and the following projected free cash flow for the next four years:

2 516.0 154.4 Year 1 Earnings and FCF Forecast ($ million) Sales 433.0 468.0 Growth vs. Prior Year Cost of Goods Sold Gross Profit Selling, General, & Admin. Depreciation EBIT 53.8 Less: Income Tax at 40% Plus: Depreciation Less: Capital Expenditures Less: Increase in NWC Free Cash Flow (7.0) 59.6 547.0 574.3 8.1% 10.3% 6.0% 5.0% (313.6) (345.7) (366.5) (384.8) 170.3 188.5 189.5 (93.6) (183.2) (109.4) (114.9) (7.5) (9.0) (9.5) 62.1 65.2 (21.5) (23.8) (24.8) (26.1) 7.0 7.5 9.0 9.5 (7.7) (10.) (9.9) (10.4) (6.3) (8.6) (5.6) (4.9) 24.6 30.8 33.3 25.3 a. Suppose Sora's revenue and free cash flow are expected to grow at a 5.1% 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? 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.)