Whitman on Wallstreet - Go X Resume2 - Google Docs (93) Whitman on Wall Stree Course...

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Whitman on Wallstreet - Go X Resume2 - Google Docs (93) Whitman on Wall Stree Course Home Do Homework - Homework X Dashboard mylab.pearson.com/Student/PlayerHomeworkV2.aspx?homeworkId=633972456&attemptId=cc00e2b5-594c-11ed-a4d3-3bbbcf245fb5&questi... Mc WSJ Stock Market & Fi... YouTube B Bloomberg.com Google Docs W Barron's Inbox (1) - henryb... Course Home Principles of Mark... Graw To Do Assignment... FIN 256 - M014 - Sonmez-Leopold - FA22 = Homework: Homework #8 Question 7, P 10-8 (similar to) < > Part 1 of 4 h H Update: Netflix P 4A.1.5: Solving for... Henry Branca 11/06/22 2:26 PM HW Score: 28.57%, 2 of 7 points Points: 0 of 1 Save Question list Question 1 Question 2 K Sora Industries has 61 million outstanding shares, $128 million in debt, $56 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 5.6% rate beyond year four. If Sora's weighted average cost of capital is 10.0%, 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 selling, 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 net working capital needs were estimated to be 18% of sales (their current level in year zero). If Sora 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 Sora's free cash flow in year 1.) Question 3 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 10.0%, what is the value of Sora stock based on this information? The stock price for this case is $ (Round to the nearest cent.) Question 4 Question 5 Question 6 Question 7 Help me solve this Etext pages Get more help Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 1 2 3 4 Earnings and FCF Forecast ($ million) 1 Sales 433.0 2 Growth vs. Prior Year 3 Cost of Goods Sold 4 Gross Profit 468.0 8.1% 516.0 10.3% (313.6) (345.7) (366.5) 547.0 6.0% 574.3 5.0% (384.8) 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2) (109.4) (114.9) 6 Depreciation (7.0) (7.5) (9.0) (9.5) 7 EBIT 53.8 59.6 62.1 65.2 8 Less: Income Tax at 25% (13.5) (14.9) (15.5) (16.3) 9 Plus: Depreciation 10 Less: Capital Expenditures 11 Less: Increase in NWC 12 Free Cash Flow 7.0 7.5 9.0 9.5 (7.7) (10.0) (9.9) (10.4) (6.3) (8.6) (5.6) (4.9) 33.4 33.6 40.1 43.1 - - Whitman on Wallstreet - Go X Resume2 - Google Docs (93) Whitman on Wall Stree Course Home Do Homework - Homework X Dashboard mylab.pearson.com/Student/PlayerHomeworkV2.aspx?homeworkId=633972456&attemptId=cc00e2b5-594c-11ed-a4d3-3bbbcf245fb5&questi... Mc WSJ Stock Market & Fi... YouTube B Bloomberg.com Google Docs W Barron's Inbox (1) - henryb... Course Home Principles of Mark... Graw To Do Assignment... FIN 256 - M014 - Sonmez-Leopold - FA22 = Homework: Homework #8 Question 7, P 10-8 (similar to) < > Part 1 of 4 h H Update: Netflix P 4A.1.5: Solving for... Henry Branca 11/06/22 2:26 PM HW Score: 28.57%, 2 of 7 points Points: 0 of 1 Save Question list Question 1 Question 2 K Sora Industries has 61 million outstanding shares, $128 million in debt, $56 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 5.6% rate beyond year four. If Sora's weighted average cost of capital is 10.0%, 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 selling, 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 net working capital needs were estimated to be 18% of sales (their current level in year zero). If Sora 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 Sora's free cash flow in year 1.) Question 3 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 10.0%, what is the value of Sora stock based on this information? The stock price for this case is $ (Round to the nearest cent.) Question 4 Question 5 Question 6 Question 7 Help me solve this Etext pages Get more help Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 1 2 3 4 Earnings and FCF Forecast ($ million) 1 Sales 433.0 2 Growth vs. Prior Year 3 Cost of Goods Sold 4 Gross Profit 468.0 8.1% 516.0 10.3% (313.6) (345.7) (366.5) 547.0 6.0% 574.3 5.0% (384.8) 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2) (109.4) (114.9) 6 Depreciation (7.0) (7.5) (9.0) (9.5) 7 EBIT 53.8 59.6 62.1 65.2 8 Less: Income Tax at 25% (13.5) (14.9) (15.5) (16.3) 9 Plus: Depreciation 10 Less: Capital Expenditures 11 Less: Increase in NWC 12 Free Cash Flow 7.0 7.5 9.0 9.5 (7.7) (10.0) (9.9) (10.4) (6.3) (8.6) (5.6) (4.9) 33.4 33.6 40.1 43.1 - -