get a total cost of capital. Team 12 does not agree with Joanna Cohen’s WACC calculation because we feel she took some liberties in her numbers‚ the most notable being that of equity. Ms. Cohen used book equity‚ which was $3‚494‚500‚000. Since Nike is a publicly traded company‚ the stock price should be multiplied by the number of shares outstanding in order to get the true equity of the firm. 271‚500‚000 multiplied by $42.09‚ would give you $11‚427‚435‚000 in equity. In Ms. Cohen’s calculation
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get a grasp of Nike and how its changing the world today with its innovative products‚ we must first take a glance at the history of the company and how it all began. Bill Bowerman was a nationally respected track and field coach at the University of Oregon and the founding father of Nike. Bill was always seeking to find ways in order to give his athletes a competitive advantage experiencing with track surfaces‚ energy drinks but most importantly- innovative running shoes. Nikes business strategy
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Nike Inc.: Cost of Capital The Weighted Average Cost of Capital (WACC) is the overall required rate of return on a firm as a whole. It is important to calculate a firm’s cost of capital in order to determine the feasibility of a particular investment for a firm. I do not agree with Joanna Cohen’s WACC calculation. She calculated value of equity‚ value of debt‚ cost of equity‚ and cost of debt all incorrectly. For value of equity‚ Joanna simply used the number stated on the balance sheet instead
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Nike‚ Inc Cost of Capital NorthPoint Large Cap Fund was considering whether to buy Nike’s stock or not. Nike was experiencing declines in sales growth‚ declines in profits and market share. However‚ Nike decided it would increase exposure in mid-price footwear and apparel lines‚ and it also commits to cut down expenses. The market responded with mixed signals to Nike’s changes. Kimi Ford‚ the portfolio manager at NorthPoint‚ did a cash flow estimation‚ and ask her assistant‚ Joanna Cohen to estimate
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analysis assumes Nike debt is trading at par – it is not ▪ Equity should be based on market value‚ not book value ▪ Hence total will be based on market cap.‚ not balance sheet ▪ Her debt cost is wrong ▪ She should use the current or projected cost rather than a historic one ▪ i.e. use a Bloomberg terminal (other terminals are available) to research yields on debt of the same credit rating as Nike ▪ It is unlikely Nike has a cost of
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NIKE‚ INC.: COST OF CAPITAL On July 5‚ 2001‚ Kimi Ford‚ a portfolio manager at NorthPoint Group‚ a mutual-fund management firm‚ pored over analysts ’ write-ups of Nike‚ Inc.‚ the athletic-shoe manufacturer. Nike ’s share price had declined significantly from the beginning of the year. Ford was considering buying some shares for the fund she managed‚ the NorthPoint Large-Cap Fund‚ which invested mostly in Fortune 500 companies‚ with an emphasis on value investing. Its top holdings
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ENTREPRENEURSHIP PROJECT CASE STUDY INTRODUCTION CONTENTS 1. | ACKNOWLGEMENT | 2. | AIM | 3. | INTODUCTION OF THE COMPANIES | 4. | COMPARISION OF MARKETING STRATEGY | 5. | DATA ANALYSIS | 6. | DATA REPORT | 7. | CONCLUSION | ACKNOWLEDGEMENT I would like to thank my teacher Mrs. Grace for her extensive support in the completion of this entrepreneurship project and also providing me with help full tips. This
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The company of Nike started in 1962 as Blue Ribbon Sports. It focus on athletic running shoes and was popular in the U.S. Guarding famous athlete as a spokesperson made Nike achieve great success. In 1985‚ the Air- Jordan basketball shoes create over $100 million profit and $20 million are using in the ads of “Just do it” which became the campaign ad in 1988. As Nike began to expand overseas market in Europe‚ the new sponsor Brazilian team which is the World Cup campaign had changed the Nike’s image
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Jordan Hirsch AF 495 October 18‚ 2012 Nike Executive Summary Executive summary In this report I will focus on Nike’s Inc. Cost of Capital and its financial importance for the company and future investors. The management of Nike Inc. addresses issues both on top-line growth and operating performance. The company’s cost of capital is a critical element in such decisions and it is important to estimate precisely the weighted average cost of capital (WACC). In my analysis‚ I will examine
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Citation Rudolph A. Hardman‚ Frances N. Hardman and Hardman‚ Inc. Appellants‚ v. United States of America‚ Appellee‚ 827 F.2d 1409 (9th Cir. 1987) Facts Rudolph‚ Frances Hardman and Hardman‚ Inc. sought review of the lower court’s decision upholding tax deficiencies assessed by the Internal Revenue Service. Hardmans characterized a payment by a corporation as a part consideration for the purchase of property from Frances Hardman‚ treated the payment as a capital gain and the corporation added the
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