Executive Summary Wanting to add Nike’s share to her portfolio‚ Kimi Ford asked her new assistant‚ Joanna Cohen‚ to estimate Nike’s cost of capital. Cohen‚ later‚ came up with the cost of capital of 8.4% that was contradicted to Ford’s cost of capital of 12%. This report points out flaws of Cohen’s assumption and recalculates the WACC to obtain the most accurate cost of capital. In the cost of equity calculation‚ we will use CAPM‚ the dividend discount model (DDM)‚ and the earnings capitalization
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Mini Case: Nike’s Decision Nike‚ a U.S.-based company with a globally recognized brand name‚ manufactures athletic shoes in such Asian developing countries as China‚ Indonesia‚ and Vietnam using subcontractors‚ and sells the products in the U.S. and foreign markets. The company has no production facilities in the United States. In each of those Asian countries where Nike has production facilities‚ the rates of unemployment and underemployment are quite high. The wage rate is very low in those
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Nike has been accused of using child labor in the production of its soccer balls and shoes for Nike in Pakistan. While Pakistan has laws against child labor‚ the government has taken very little action to terminate it. It is said that only a boycott by the United States and other nations will have any impact on child-based industries. In addition‚ the U.S constitution states that child labor is an illegal and inhumane practice and any U.S. company found guilty practicing and encouraging it will
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594 Total current assets 11‚531 11‚297 b. What method does the company use to value inventory? The Notes indicate that NIKE uses “last in first out‚” or LIFO‚ for domestic inventories and “first in first out‚” or FIFO‚ for international inventories c. What depreciation method does the company use? The Notes indicate that NIKE uses the straight line method for buildings and leasehold improvements and the declining balance method for machinery and equipment. As with the
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GUERRILLA RECRUITING TACTICS - Guerrilla recruiting is a style of recruiting that makes use of the tactics and strategies that have been used for centuries by warfare. According to Drucker (1998)‚ these tactics are highly focused form of recruiting that are fully integrated and driven by fundamental motives of the organization. These tactic are also typically deployed by an organization that is inferior both in numbers and tools against a larger and more mechanized competitor‚ but that is not always
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The reputation of any business ultimately depends on the quality of its products. High quality products need high quality people to create‚ design‚ produce and deliver them. So if a business is to maintain its reputation it needs to do well at recruiting high quality employees. For any business offering a large element of personal service‚ an ability to recruit‚ train and retain high quality staff is particularly vital. This Case Study looks at how McDonald’s‚ the world’s largest and fastest
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Do you think the criticism of Nike is fair‚ considering that the host countries are in dire needs of creating jobs?Yes and no. In a pure capitalist economic system employers will seek to pay workers as little in cash and benefits as possible and will locate his plant in the location that incurs the least cost. That being said there is a certain moral consideration to pay a wage that allows the worker to reasonably support themselves and their dependents. Lastly you should consider Henry Ford’s Famous
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head of the healthcare recruiting firm Healthcare Recruitment Counselors (HCRC)‚ is also a chiropractor who specialized in sports medicine and physical therapy‚ however‚ he gave up his practice to focus on staffing. Since he has experience opening and staffing numerous offices‚ Torchin felt he could solve come of the problems that he noticed in the medical field‚ such as medical professionals having difficulty finding positions and medical facilities having difficulty recruiting staff. Clients and healthcare
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to Kimi about Nike’s WACC‚ she calculated it to be 8.3%. She also provided some assumptions she made while developing this WACC. First‚ she noted that she decided to use a single cost of capital because she did not believe that other segments with Nike were large enough to make a considerable difference on the weights. She determined that Nike’s segments also did not have a significant difference in risk to justify using a multiple cost of capital. We agreed with Joanna and also used a single segment
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RECRUITING AND RETAINING EMPLOYEES IN A SEASONAL ENVIRONMENT November 1‚ 2011 Many organizations do not have the luxury of having a constant demand in their businesses. Some companies face a large increase in business for the holiday season‚ summer vacation‚ or for a major event throughout the year. These predictable trends allow many businesses to hire additional employees to help with the demand. The organizations are then forced to lay several employees off when the demand returns to
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