Year	0	1	2	3	4
Sales	240	270	290	310	325.5
Growth versus Prior Year		12.5%	7.4%	6.9%	5.0%
EBIT (10% of Sales)		27.00	29.00	31.00	32.55
Less: Income Tax (37%)		(9.99)	10.73	11.47	12.44
Less Increase in NWC (12% of Change in Sales)		3.6	2.4	2.4	1.86
Free Cash Flow		13.41	15.87	17.13	18.65

Banco Industries expects 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 12%, $50 million in cash, $60 million in debt, and 18 million shares outstanding. If Banco Industries can reduce their operating expenses so that EBIT becomes 12% of sales, by how much will their stock price increase?

A) $4.98

B) $8.89

C) $10.12

D) $3.36

E) $2.80

Joey buys a bond for $10,000 that will mature in 25 years. He will receive a single payment of $150,000 when the bond reaches maturity. What is the interest rate?

	6.67%
	11.44%
	10%
	15%
	114.4%