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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Invertible matrix From Wikipedia‚ the free encyclopedia (Redirected from Nonsingular matrix) Jump to: navigation‚ search In linear algebra an n-by-n (square) matrix A is called invertible (some authors use nonsingular or nondegenerate) if there exists an n-by-n matrix B such that where In denotes the n-by-n identity matrix and the multiplication used is ordinary matrix multiplication. If this is the case‚ then the matrix B is uniquely determined by A and is called the inverse of A‚
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Matrix Algebra http://elearning.usm.my Md Harashid bin Haron‚ Ph.D. Accounting Section‚ School of Management‚ Universiti Sains Malaysia (USM)‚ 11800 Pulau Pinang‚ Malaysia Email: harashid@usm.my ; mdharashid@gmail.com Matrices? A rectangular array of numbers consisting m horizontal rows and n vertical columns. 5 3 4 2 2 1 6 4 2 A= 5 3 4 2 2 1 6 4 2 A has a size of 3 x 3; 3 x 3 matrix; 3 rows and 3 columns (row is specified
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BCG Matrix Opportunity - Threat Analysis Submitted to: Professor Clyde By : Parth Mithani Roll No. 60 F.Y.M.M.S. Alkesh Dinesh Modi Institute for Financial & Management Studies. 1) The BCG Matrix The BCG / Growth-Share matrix is a model developed by the Boston Consultancy Group in the early 1970’s. It is a well known tool for a marketing manager. It is based on the observation that a company’s business units can be classified into four main categories based on combinations of market growth
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deciding whether to buy Nike’s Stock Nike’s net income has fallen from $800 million to $580 million since 1997. Also its profit and market share have declines significantly from 48% to 42% (Shoe products market share) from 1997 to 2000 To counter this down fall Nike has decided to develop more athletic shoe products in mid-priced segment and also to push their apparel line. It has also decided to cut down expenses Analyst reactions are mixed – Lehman Brothers report a recommended “Strong Buy” whereas
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EXTERNAL FACTOR EVALUATION (EFE) MATRIX OPPORTUNITY THREATS POLITICAL Global inequalities Meeting the need of the present without comprising future has to be taken into account by food industry without undermining bottom line balance sheets Food cost climbing and global warming ECONOMY Rising cost of petroleum Input cost for bakers included commodities have declined. Bakeries may be passing along the cost of suppliers purchased on contracts signed before commodity price began to fall. Industry
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firm’s bond‚ Johanna only used the interest expense of the year divided by the average debt balance‚ which fully ignored the discounted cash flow of the cost of debt. 2. If you do not agree with Cohen’s analysis‚ calculate your own WACC for Nike and be prepared to justify your assumptions. Combining the analysis above‚ we now give our own WACC calculation as following: 2.1 The value of debt(based on EXIHIBIT 3). Since the book value of debt may represent the market value‚ we merely
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BCG Analysis In term of Boston Consulting Group‚ there are four types of business. According to the research‚ it shows that Poh Huat Resources Holding is exists as a question mark in BCG matrix. Question marks represent business units having low relative market share and located in a high growth industry. Hence‚ Poh Huat Resources Holding should invest huge amount of cash to maintain or gain market share. If successes in gaining a huge market share‚ then Poh Huat Resources Holding has potential
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solutions 1.3 Critically contrast Primary and Secondary research methods 2.1 Evaluate the use of tools such as Boston and Ansoff Matrix to business situations 2.2 Analyse the effectiveness of models such as Porter’s Generic Strategies 3.1 Evaluate consumer buying behaviour and the adoption process 3.2 Analyse the role of marketing mix to specific products 3.3 Evaluate the Product Life Cycle in various forms 3.4 Investigate different pricing strategies 3.5 Analyse the significance of place and different
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McKinsey Matrix (The GE multi factoral) With the help of McKinsey and Company‚ a leading consulting group‚ the General Electric Company (GE) developed a popular business portfolio analysis tool called the GE Multifactor Portfolio Matrix. This tool helps managers develop organizational strategy that is based primarily on market attractiveness and business strengths. Industry attractiveness might be determined by such factors as the rate of industry growth‚ the number of competitors in an industry
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