Sora Industries has 62 million outstanding shares, $130 million in debt, $51 million in cash, and the following projected free cash flow for the next four years: Year Earnings and FCF Forecast ($ 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 40% 0 433.0 1 468.0 8.1% (313.6) 154.4 (93.6) (7.0) 53.8 (21.5) 2 516.0 10.3% (345.7) 170.3 (103.2) (7.5) 59.6 (23.8) 3 547.0 6.0% (366.5) 180.5 (109.4) (9.0) 62.1 (24.8) 4 574.3 5.0% (384.8) 189.5 (114.9) (9.5) 65.2 (26.1) a. Suppose Sora's revenue and free cash flow are expected to grow at a 5.6% rate beyond year four. If Sora's weighted average cost of capital is 11.0%, what is the value of Sora stock based on this information? The stock price for this case is $ (Round to the nearest cent.)

Sora Industries has 62 million outstanding shares, $130 million in debt, $51 million in cash, and the following projected free cash flow for the next four years: Year Earnings and FCF Forecast ($ 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 40% 0 433.0 1 468.0 8.1% (313.6) 154.4 (93.6) (7.0) 53.8 (21.5) 2 516.0 10.3% (345.7) 170.3 (103.2) (7.5) 59.6 (23.8) 3 547.0 6.0% (366.5) 180.5 (109.4) (9.0) 62.1 (24.8) 4 574.3 5.0% (384.8) 189.5 (114.9) (9.5) 65.2 (26.1) a. Suppose Sora's revenue and free cash flow are expected to grow at a 5.6% rate beyond year four. If Sora's weighted average cost of capital is 11.0%, what is the value of Sora stock based on this information? The stock price for this case is $ (Round to the nearest cent.)

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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