Under Armour Inc. (UA) has been one of the major sports business success stories of recent years‚ a big-talking newcomer in the sports apparel market that has successfully established itself; its profit next year is on course to be more than the triple its 2007 net income. But a compound annual growth rate of 34% since 2005 is a double-edged sword: yes‚ it reflects a fast-growing company‚ but it also can lead to an over-cooking of a stock’s price. That’s the view of JPMorgan Chase analyst Matthew
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Corporate Finance Nike‚ INC: Cost of capital 1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? Definition of WACC (Weighted Average Cost of Capital): WACC is basically the average of the cost of finance (debt and equity). Since a company’s assets can be financed by debt or equity‚ WACC can show the averages of the costs involved in the sources of financing. These costs are then weighted
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Position……………………………………………………………….p.30 Strategic Plan……………………………………………………………………………………..p.33 Conclusion………………………………………………………………………………………...p.38 LIST OF EXHIBITS 1. Sales Trends Graph……………………………………………………………………………p.5 2. Net Income Trends Graph…………………………………………………………………….p.5 3. Nike Board of Directors Table………………………………………………………………...p.11 4. Table of Key Financial Ratios………………………………………………………………...p.22 5. Net Income Trend Graph………………………………………………………………….…..p.24 6. Primary Strategic Match Position
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2. How has Southwest executed value-based pricing Southwest has historically and relentlessly pursued a low-price strategy. Its goal was to always be the cheapest carrier in any market where it flew. This would ultimately require the competing carriers to drop their prices to match those of Southwest in order to be competitive. This is something that has come to be known as the “Southwest Effect.” The easy answer to why it worked is based on Southwest’s cost structure. The business plan developed
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taking the weighted average‚ we can see how much interest the company has to pay for every dollar it finances. Basically‚ the WACC is the minimum required return that the company must earn to satisfy its creditors‚ owners‚ and other providers of capital‚ or they will invest in another company that has higher returns. In this case‚ I will first address the issues with Cohen’s calculation‚ and then analyze an new WACC to decide whether we should invest in Nike Inc. Many issues should be addressed regarding
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choose to use a surrogate mother‚ where another woman carries their child. One way of surrogacy is when a woman who ’s unable to carry a baby to term‚ but is otherwise fertile‚ has her embryos transplanted to the surrogate mother. The eggs might be fertilized by the biological father or by artificial insemination if the male has fertility issues. In other cases‚ a surrogate mother is in fact the biological mother of the child as her very own eggs are used to create the embryo. In certain states‚ such
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keep one’s feet warm‚ it is a fashion statement‚ an athletic enhancer‚ rebellion‚ status‚ and the ins and outs of coolness. Shoes‚ mainly athletic shoes have changed drastically throughout the years. From weight‚ size‚ look‚ and comfort ability‚ Nike has been the leading footwear company to develop and lead such a growing industry. Peter Hitchcock‚ the author of Oscillate Wildly‚ wrote‚ “The shoe is magical‚ within both the history of the commodity and the psychological compulsions of modern “man
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Globalisation a11d Nike GLOBALISATION Globalisation is the growing relations of international markets and it involves the economic activity in the production of goods and services among countries. It involves aspects such as growth and productivity‚ employment and skills wages and unequal distribution in wages both internationally as within a country. Hence‚ the belief that globalisation leads to growth is present all over both the works of Friedman and Norberg‚ but can be illustrated by a quote
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Environment is our surrounding which includes everything from a non-living to a living being. There are two kinds namely the natural environment and Built environment. In actual parlance if one has to describe a natural environment it is one that has natural existence and the built is one that man is responsible for like the dams cities etc. The natural atmosphere is being polluted due to the unnatural factors. While natural causes like volcano’s have its own turn in causing pollution it is the
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To: Kim Ford Date: 2/13/13 Subject: Nike’s Cost of Capital I agree with Ms. Ford’s estimate of Nike’s Cost of Capital at 8.4% The WACC is the appropriate method for valuing Nike’s capital. The WACC takes your cost of debt x the percent of capital + CAPM x equity percent of capital and it tells the rate of return the company needs to return based on its capital structure. In my opinion Ms. Ford has correctly assumed Nikes cost of debt and cost of equity. Her projection for cost of debt uses
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