Nike Case Study Discussion

Joanna discussion essay Kimi Ford, a portfolio manager at NorthPoint Group, was considering purchase shares of Nike Inc. for the inventory she managed. She read through many analyst write-ups on Nike, including on the whole(a) the analyst reputes that she could find about the recent conflict Nike had held to go its fiscal year 2001 results. The reports showed that while some analysts feeling Nikes monetary targets were too aggressive, others saw significant ontogeny opportunities in dress up and in Nikes international businesses. Kimi therefore contumacious to develop her bear depend to come to a clearer conclusion. Her forecast showed that for a drop rate of 12%, Nike was overvalued at its local share price. However, a quick sensitivity analysis she besides did revealed that Nike was undervalued at s conclusion away rates at a lower place 11.2%. Since Kimi had to attend a meeting, she requested her modern assistant Joanna Cohen to estimate Nikes cost of cap ital. To start with, Joanna collected all the data she vista she might need for her analysis.

The reports she used include Nikes Consolidated Income Statements for the age 1995-2001, its Consolidated Balance Sheets for the years 2000 and 2001, the current pileus marketplace and financial Information provided by Bloomberg Financial Services, and her manager Kimis Discounted hard currency Flow and Sensitivity Analysis report showing growth assumptions for the next 10 years. By the end of the day, she submitted her cost of capital estimate and a memo explaining her assumptions to Kimi. The quest paragraphs discu ss Joannas report, crowing an analysis of h! er assumptions and her choice of data and manner in work out an estimate of Nikes cost of capital. 1. Selection of unmarried Cost of Capital Considering that Nike has multiple business segments, it would seem appropriate to estimate be of capital for each segment individually. However, 92% of Nikes jibe revenue comes from its footwear and prune segments. In addition, footwear and apparel are...If you postulate to get a full essay, order it on our website: OrderCustomPaper.com

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