Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to anindustry growth rate of 5% in year 4. The spreadsheet above shows a simplified pro forma forBanco Industries. If Banco industries has a weighted average cost of capital of 11%, $50 millionin cash, $80 million in debt, and 18 million shares outstanding, which of the following is the bestestimate of Bancoʹs stock price at the start of year 1?A) $6.52B) $11.74C) $13.04D) $23.48
