Sora Industries has 6868 million outstanding shares, $120 million in debt, $49 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 4.4% rate beyond year 4. If Sora's weighted average cost of capital is 11.0% , what is the value of Sora's 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. Let's return to the assumptions of part (a ) and suppose Sora can maintain its cost of goods sold at 67% of sales. However, now suppose Sora 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 (which is their current level in year 0). If Sora can reduce this requirement to 12% of sales starting in year 1, but all other assumptions remain as in part (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.)
Sora Industries has 6868 million outstanding shares, $120 million in debt, $49 million in cash, and...
Sora Industries has 63 million outstanding shares, $130 million
in debt, $55 million in cash, and the following projected free cash
flow for the next four years:
2 516.0 154.4 Year 1 Earnings and FCF Forecast ($ million) Sales 433.0 468.0 Growth vs. Prior Year Cost of Goods Sold Gross Profit Selling, General, & Admin. Depreciation EBIT 53.8 Less: Income Tax at 40% Plus: Depreciation Less: Capital Expenditures Less: Increase in NWC Free Cash Flow (7.0) 59.6 547.0 574.3 8.1%...
Sora Industries has 70 million outstanding shares, $121 million in debt, $53 million in cash, and the following projected free cash flow for the next four years: 433.0 Earnings and FCF Forecast ($ 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% 9 Plus: Depreciation 10 Less: Capital Expenditures 11 Less: Increase in NWC 12 Free Cash Flow...
Sora Industries has 6868 million outstanding shares, $120 million in debt, $49 million in cash, and the following projected free cash flow for the next four years : Year 0 1 2 3 4 Earning & FCF Forecast ($millions) 1 Sales 433 468 516 547 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General & Admin. (93.6) (103.2) (109.4) (114.9)...
Sora Industries has 6868 million outstanding shares, $120 million in debt, $49 million in cash, and the following projected free cash flow for the next four years : Year 0 1 2 3 4 Earning & FCF Forecast ($millions) 1 Sales 433 468 516 547 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General & Admin. (93.6) (103.2) (109.4) (114.9)...
Sora Industries has 6868 million outstanding shares, $120 million in debt, $49 million in cash, and the following projected free cash flow for the next four years : Year 0 1 2 3 4 Earning & FCF Forecast ($millions) 1 Sales 433 468 516 547 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General & Admin. (93.6) (103.2) (109.4) (114.9)...
Sora Industries has 68 million outstanding shares, $125 million in debt,$47 million in cash, and the following projected free cash flow for the next four years: Year 0 1 2 3 4 Earnings and FCF Forecast ($ million) 1 Sales 433.0 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2) (109.4) (114.9) 6...
Sora Industries has 64 million outstanding shares, $127 million in debt, $42 million in cash, and the following projected free cash flow for the next four years: Year 0 1 2 3 4 5 Earnings and FCF Forecast ($ million) 1 Sales 433.0 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2) (109.4)...
Sora Industries has 61 million outstanding shares, $130 million in debt, $60 million in cash, and the following projected free cash flow for the next four years: Year 0 1 2 3 4 Earnings and FCF Forecast ($ million) 1 Sales 433 468 516 547 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2) (109.4) (114.9)...
.: a. Suppose Sora's revenue and free cash flow are expected to grow at a rate beyond year 4. If Sora's weighted average cost of capital is , what is the value of Sora's stock based on this information? $4.03 is correct 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. Let's return to the assumptions of...
Sora Industries has 68 million
outstanding shares, $ 127 million in debt, $ 40 million in cash,
and the following projected free cash flow for the next four years
LOADING...: a. Suppose Sora's revenue and free cash flow are
expected to grow at a 4.5 % rate beyond year 4. If Sora's weighted
average cost of capital is 11.0 %, what is the value of Sora's
stock based on this information? b. Sora's cost of goods sold was
assumed to...