o Sora Industries has 60 milion outstanding shares, $130 million in debt, 553 million in cash and the following projected free cash flow for the next four years: 1 621 Year 0 2 4 Earnings and FCF Forecast (5 million) 1 Sales 433.0 4680 516,0 5420 5743 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5,0% 3 Cost of Goods Sold (3136) (34573 (3665) (3548) 4 Gross Profit 154.4 1703 180.5 1895 5 Seling. General, & Admin (935) (1032) (1094) (1149) 6 Depreciation (7.0) (7.5) (90) (9.5) 7 EBIT 538 59.6 652 8 Less Income Tax at 40% (215) (238) (248) (26.1) OP Decreciation 70 7.5 90 a. Suppose Sora's revenue and free cash flow are expected to grow at a 53% rate beyond year four. It Sora's weighted average cost of capital is 12.0% what is the value of Sora stock based on this information? The stock price for this case 'n $ (round to the nearest cent) b. Sona's cost of goods sold was assumed to be 67% of sales of the 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 Round to the nearest cent) c. Return to the assumptions of part (a) and suppose Sora con maintain its cost of goods sold at 67% of sales. However the firm reduces its sein, general and administrative expenses from 2006 of sales to 10% of sales. What stock price would you estimate now? Assume no other expenses, except taxes, are affected 2. Suppose Sora's revenue and free cash flow are expected to grow at a 5.3% rate beyond year four. If Soma's weighted average cost of capital is 12.0%, 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 seling, 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 networking capital needs were estimated to be 18% of sales (their current level in year zero). If Som 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 Sara's free cash flow in year 1.) a. Suppose Sora's revenue and free cash flow are expected to grow at a 5.35 rate beyond year four. If Sora's weighted average cost of capital is 12.0%, what is the value of Sora stock based on this information? The stock price for this case is $(Round to the nearest cont.) b. Sona's cost of goods sold was assumed to be 67% of sales. Wits cost of goods sold is actually 70% of sales, how would the estimate of the stock's vate change? The stock price for this case, when COGS increases, is (Round to the nearest cont.) c. Retum to the assumptions of part (a) and suppose Sora can maintain its cost of goods sold at 67% of sales. However, the fem reduces its seling, 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 Enter your answer in each of the answer boxes