Question: Please explain how to input into financial calc!!!!!!!! 8) Use the table for the question(s) below FCF Forecast (S million) Year Sales Growth versus Prior

Please explain how to input into financial calc!!!!!!!!Please explain how to input into financial calc!!!!!!!! 8) Use the table

8) Use the table for the question(s) below FCF Forecast (S million) Year Sales Growth versus Prior Year EBIT (10% of Sales) Less: Income Tax (37%) Less Increase in NWC (12% of Change in Sales Free Cash Flow 2 290 7.4% 29.00 10.73 2.4 15.87 4 325.5 5.0% 32.55 12.44 1.86 18.65 240 270 12.5% 27.00 (9.99) 3.6 13.41 6.9% 31.00 11.47 2.4 17.13 Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to an industry growth rate of 5% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. If Banco industries has a weighted average cost of capital of 11%, $50 million in cash, $80 million in debt, and 18 million shares outstanding, which of the following is the best estimate of Banco's stock price at the start of year 1? A) $6.52 B) $11.74 C) $13.04 D) $23.48 Answer: Explanation: C) FCF5 = $18.65 million x (1 + 0.05) = $19.5825 million; V4= $19.5825 million/ (0.11-0.05)= $326.38 million; using a financial calculator, Vo $264.7655 million; Po = ($264.7655 million + 50-80) / 18 million = $13.04 Diff 2 Var: 50+

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