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Use the table for the question(s) below. 4 240 FCF Forecast (5 million Year 0 1 2 3 Sales 270 290 310 325.5 Growth versus

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Use the table for the question(s) below. 4 240 FCF Forecast (5 million Year 0 1 2 3 Sales 270 290 310 325.5 Growth versus Prior Year 125% 7.4% 6.9% 5.0% EBIT (10% of Sales) 32.40 34 80 37 20 39.06 Less: Income Tax (37) (6.48) (6.96 (7.81) Less Increase in NWC (12% of Change in Sales) 3.60 2.40 240 186 Free Cash Flow 2232 2544 2736 29388 Banco Industries expect sales to grow at a rapid rate over the next 3 years, but settle to an industry growth rate of 5% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. Banco industries has a weighted average cost of capital of 11%, $30 million in cash, $70 million in debt, and 18 million shares outstanding. If Banco Industries can reduce its operating expenses so that EBIT becomes 12% of sales, by how much will its stock price increase? O A. $4.16 B. $12.47 O C. $4.99 O D. $7.27

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