Nike Case Study Discussion

Joanna discussion essay Kimi Ford, a portfolio manager at NorthPoint Group, was considering purchasing 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 encounter Nike had held to go its fiscal year 2001 results. The reports showed that while some analysts approximation Nikes monetary targets were too aggressive, others saw significant gain opportunities in dress up and in Nikes international businesses. Kimi therefore trenchant to develop her bear picture to come to a clearer conclusion. Her forecast showed that for a drop rate of 12%, Nike was overvalued at its topical share price. However, a quick sensitivity analysis she in any case did revealed that Nike was undervalued at s conclusion away rates downstairs 11.2%. Since Kimi had to attend a meeting, she requested her modern assistant Joanna Cohen to estimate Nikes cost of c rownwork. To start with, Joanna collected all the data she sight she might need for her analysis.

The reports she used include Nikes Consolidated Income Statements for the geezerhood 1995-2001, its Consolidated Balance Sheets for the years 2000 and 2001, the current capital letter trade and financial Information provided by Bloomberg Financial Services, and her manager Kimis Discounted coin 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 d iscuss Joannas report, giving an analysis o! f her assumptions and her choice of data and manner in astute 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 cost of capital for each segment individually. However, 92% of Nikes jibe tax income comes from its footwear and prune segments. In addition, footwear and apparel are...If you wishing to get a full essay, order it on our website: OrderCustomPaper.com

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