Ee 64. Consider the following data for Nike Inc: In 2018, it had $39,000.00 million in sales with a 15% growth rate in 2019, but then slows by 2% to the long-run growth rate of 5% by 2024 Nike expectsEBIT to be 13% of sales, increases in net working capital requirements to be 5% of any increases in sales, and capital expenditures to equal depreciation expenses. Nike also has $525 milion incash, $38 million in debt, 1,626 million shares outstanding, a tax rate of 25%, and a weighted average cost of capital of 9%.a. Suppose you believe Nike's initial revenue growth rate will be between 10% and 20% (with growth slowing linearly to 5% by year 2024) What range of prices for Nike stock is consistent with theseforecasts?b. Suppose you believe Nike's initial revenue EBIT margin will be between 12% and 14% of sales. What range of prices for Nike stock is consistent with these forecasts?c. Suppose you believe Nike's weighted average cost of capital is between 8.5% and 11%. What range of prices for Nike stock is consistent with these forecasts?d. What range of stock prices is consistent if you vary the estimates as in parts (a), (b), and (c) simultaneously?a. Suppose you believe Nike's initial revenue growth rate will be between 10% and 20% (with growth slowing linearly to 5% by year 2024). What range of prices for Nike stock is consistent with theseforecasts?The range of prices will beHighest price share: $Lowest price share: $(Round to the nearest cent.)(Round to the nearest cent.)

Name: Ee 64. Consider the following data for Nike Inc: In 2018, it had $39,0
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Description: Ee 64. Consider the following data for Nike Inc: In 2018, it had $39,000.00 million in sales with a 15% growth rate in 2019, but then slows by 2% to the long-run growth rate of 5% by 2024 Nike expectsEBIT to be 13% of sales, increases in net working

In order to calculate the sensitivity of the share price relative to the initial growth rate, we…

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a. Suppose you believe Nice's initial revenue growth rate will be between 10% and 20% (with growth slowing linearly to 5% by year 2024). What range of prices for Nike stock is consistent with these forecasts? The range of prices will be Highest price share: S Lowest price share: $ (Round to the nearest cent.) (Round to the nearest cent.)

a. Suppose you believe Nice's initial revenue growth rate will be between 10% and 20% (with growth slowing linearly to 5% by year 2024). What range of prices for Nike stock is consistent with these forecasts? The range of prices will be Highest price share: S Lowest price share: $ (Round to the nearest cent.) (Round to the nearest cent.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

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