Sora Industries has 68 milion outstanding shares. 124 million in debt. 550 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 5.8% rate beyond year four if Sora's weighted average cost of capital is 90%, 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? e. Return to the assumptions of part(a) and suppose Sora con maintains cost of goods sold at 67% of However, the firm reduces itselling generat, and administrative expenses from 20% of sales to 10% of sales. What stock price would you estimate now? (Assume no other expenses, exceptes are affected) d. Sora's networking capital needs were estimated to be 18% of tales (their current level in year Yero). If Sora can reduce this requirement to 12 of starting in your I, but all other assumptions are as in (a) what stock price do you late for Sor? (Mint: This change will have the largest impact on Sora's free cash flow in year 1) CED a. Suppose Sora's revenue and free cash flow are expected to grow at 68 rate beyond year four. If Sona's weighted average cost of capital is 90% what is the value of Sora stock based on this information? The stock price for this cases $(Round to the nearest cent) 0 2 3 4 433.0 Year Earnings and FCF Forecast ($ 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 25% 9 Plus: Depreciation 10 Less: Capital Expenditures 11 Less: Increase in NWC 12 Free Cash Flow 547.0 6.0% (366.5) 180.5 (109.4) 468.0 8.1% (313.6) 154.4 (93.6) (7.0) 53.8 (13.5) 7.0 (7.7) (6.3) 33.4 516.0 10.3% (345.7) 170.3 (103.2) (7.5) 59.6 (14.9) 7.5 (10.0) (8.6) 33.6 m (9.0) 574.3 5.0% (384.8) 189.5 (114.9) (9.5) 65.2 (16.3) 9.5 (10.4) (4.9) 43.1 62.1 (15.5) 9.0 (9.9) (5.6) 40.1