Business, 30.06.2020 18:01 babysisjessica1

Consider the following data for Nike Inc, in 2009 it had 19,250 million in sales with a 10% growth rate in 2010, but then slows by 1% to the long-run growth rate of 5% by 2015. Nike expects EBIT to be 10% of sales, increases in net working capital requirements to be 10% of any increases in sales, and capital expenditures to equal depreciation expenses. Nike also has 2,300 million in cash, 32 million in debt, 486 million shares outstanding, a tax rate of 24%, and a weighted average cost of capital of 10%. a. Suppose you believe Nike's initial revenuse growth rate will be between 7% and 11% (with growth always slowing linearly to 5% by year 2018.) What range of prices for Nike stock is consistent with these forecasts?
b. Suppose you believe Nike's initial revenue EBIT margin will be between 9% and 11% of sales. What range of prices for Nike stock is consistent with these forecasts?
c. Suppose you believe Nike's weighted average cost of capital is between 9.5% and 12%, What range of prices for Nike stock is consistent with these forecasts?
d. What range of stock prices is consistent if you vary the estimates as in parts (a), (b), and (c) simultaneously?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 20:30

The federal act which provided over $7 billion to the epa to protect and promote "green" jobs and a healthier environment is the - national environmental policy act. - resource recovery act.- resource conservation and recovery act.- american recovery and reinvestment act. - clean air act.

Answers: 1

Answer

Business, 23.06.2019 16:30

Ethics refers to fundamental principles of right and wrong; ethical behavior is behavior that is consistent with those principles. hrm decisions should be ethical, but the evidence suggests that is not always the case. many ethical issues in the workplace involve hrm. in the context of ethical human resource management, hr managers must view employees as having basic rights. in this activity, you will look at the four principles for ethical behavior and the basic rights employees should expect in the work environment. hr managers must view employees as having basic rights, for such a view reflects ethical principles embodied in the u.s. constitution and bill of rights. organizations often face situations in which the rights of employees are affected. ethical, successful companies act according to four principles: emphasizing mutual benefits, employees assuming responsibility for the actions of the company, companies having a sense of purpose or vision that employees value, and emphasizing fairness.

Answers: 3

Answer

Business, 23.06.2019 17:30

While discussing their marketing campaign for a new product, the members of the cross-functional team responsible for carver inc. realized that a couple of changes relating to their prior plan would be beneficial. the offer of a franchising that had earlier been brushed off by the company head was discussed thoroughly and it was decided that it would be implemented on a trial basis initially, and on full scale if found to work well. from the information provided, it can be concluded that this cross-functional team has a high degree of a) conformity b) demography c) uncertainty d) reflexivity e) diversity

Answers: 2

Answer

Business, 23.06.2019 18:00

Nicholas believes that everyone deserves a second chance, even those who get in trouble with the law. that is why he wants to be a probation officer. which educational path will most likely lead to his success? a. he should enroll in a certification program at a career college and seek a job with someone in the field. b. he should enroll in an associate’s degree program at a vocational school and seek an internship with a bailiff in a courtroom. c. he should enroll in a graduate program at a law school and spend time with a corrections officer at a jail. d. he should enroll in a bachelor’s degree program at a university and seek an apprenticeship with someone in the field.

Answers: 1

Answer

You know the right answer?

Consider the following data for Nike Inc, in 2009 it had 19,250 million in sales with a 10% growth r...

Questions