Sora Industries has 60 million outstanding? shares, $123 million in? debt, $43million 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 4.7 % rate beyond year four. If? Sora's weighted average cost of capital is 14.0 % 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.)