Nike has sales of 36 billion in 2019. Suppose you expect its sales to grow at a rate of 5% forever. Based on Nike's past profitability and investment needs, you expect EBIT to be 7% of sales, increases in net working capital requirements to be 12% of any increase in sales, and capital expenditures to equal depreciation expenses. Nike pays 20% income tax. The opportunity cost of capital is 7%. Nike has 0.9 billion shares outstanding, 3.3 billion in cash, 1.2 billion in debt. Calculate the share price for 2020 using the discounted free cash flow model. Round your final answer to one decimal
Nike has sales of 36 billion in 2019. Suppose you expect its sales to grow at a rate of 5% forever. Based on Nike's past profitability and investment needs, you expect EBIT to be 7% of sales, increases in net working capital requirements to be 12% of any increase in sales, and capital expenditures to equal depreciation expenses. Nike pays 20% income tax. The opportunity cost of capital is 7%. Nike has 0.9 billion shares outstanding, 3.3 billion in cash, 1.2 billion in debt. Calculate the share price for 2020 using the discounted free cash flow model. Round your final answer to one decimal
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...
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Nike has sales of 36 billion in 2019. Suppose you expect its sales to grow at a rate of 5% forever. Based on Nike's past profitability and investment needs, you expect EBIT to be 7% of sales, increases in net working capital requirements to be 12% of any increase in sales, and capital expenditures to equal
Calculate the share price for 2020 using the discounted
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