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Sora Industries currently has 60 million outstanding shares, $120 million in debt and $40 million...

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Accounting

Sora Industries currently has 60 million outstanding shares, $120 million in debt and $40 million in excess cash. Sales in the recently concluded financial year was $433 million. They are projected to grow at 8.6% next year, and from the second year onwards, at 5% per year. Furthermore, you are given that in the last financial year, Soras Cost of goods sold was 70% of sales, Selling, general and administrative expenses were 20% of sales, Depreciation was 1.5% of sales Net fixed assets were 22.5% of sales NOWC was 18% of sales.

Assume these ratios remain constant forever, except that COGS will be 67% of sales in each year moving forward. If the tax rate for the firm is 40%, and the WACC is 10%. What is the stock price of Sora Industries using the FCF model?

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