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Sora Industries has 69 million outstanding shares, 129 million in debt, 51 million in cash, and the following projected free cash flow for the next
Sora Industries has 69 million outstanding shares, 129 million in debt, 51 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 4.8% rate beyond year 4. If Sora's weighted average cost of capital is 10.0%, what is the value of Sora's 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. Let's return to the assumptions of part (a) and suppose Sora can maintain its cost of goods sold at 67%
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