Use the Table for the Question(s) Below

question 28

Multiple Choice

Use the table for the question(s) below. FCF Forecast ($ million)
Banco Industries expect sales to grow at a rapid rate over the next 3 years, but settle to an industry growth rate of 5% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. Banco industries has a weighted average cost of capital of 11%, $40 million in cash, $70 million in debt, and 18 million shares outstanding. If Banco Industries can reduce its operating expenses so that EBIT becomes 12% of sales, by how much will its stock price increase?

• A) $3.27
• B) $3.92
• C) $5.72
• D) $9.80

---

Definitions:

Fraud in the Execution

A situation where a person is deceived into signing a contract or document not knowing its true nature or essence, leading to an invalid contract.

Types of Duress

include various forms of coercion or pressure exerted on a person to compel them to act against their will in legal contexts, such as physical, economic, or emotional duress.

Defense of Duress

The defense of duress involves arguing that an individual committed a crime as a direct result of being compelled or threatened by someone else, thereby casting doubt on the voluntary nature of the criminal act.

Contract Involved

Pertains to the specific agreement or legal document at the center of a discussion, negotiation, or dispute.