不 5% of any increases in sales, and capital expenditures to equal depreciation expenses. Nike also has $12.078.07 million in cash, $11,644 52 million in debt, 1,637 26 million shares outstanding, a tax rate of 20%, and a weighted average cost of capital of 9.0% Consider the following data for Nike Inc.: In 2022, it had $47.530.00 million in sales with a 10.0% growth rate in 2023, but then slows by 1% to the long-run growth rate of 5.0% by 2028. Nike expects EBIT to be 16% of sales, increases in net working capital requirements to be a. Suppose you believe Nike's initial revenue growth rate will be between 7.5% and 12.5% (with growth slowing linearly to 5.0% by year 2028) What range of prices for Nike stock is consistent with these forecasts? b. Suppose you believe Nike's initial revenue EBIT margin will be between 15% and 17% 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 11.0% 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 7.5% and 12.5% (with growth slowing linearly to 5.0 % by year 2028). What range of prices for Nike stock is consistent with these forecasts? The range of prices will be Highest price per share: $ (Round to the nearest cent)
不 5% of any increases in sales, and capital expenditures to equal depreciation expenses. Nike also has $12.078.07 million in cash, $11,644 52 million in debt, 1,637 26 million shares outstanding, a tax rate of 20%, and a weighted average cost of capital of 9.0% Consider the following data for Nike Inc.: In 2022, it had $47.530.00 million in sales with a 10.0% growth rate in 2023, but then slows by 1% to the long-run growth rate of 5.0% by 2028. Nike expects EBIT to be 16% of sales, increases in net working capital requirements to be a. Suppose you believe Nike's initial revenue growth rate will be between 7.5% and 12.5% (with growth slowing linearly to 5.0% by year 2028) What range of prices for Nike stock is consistent with these forecasts? b. Suppose you believe Nike's initial revenue EBIT margin will be between 15% and 17% 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 11.0% 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 7.5% and 12.5% (with growth slowing linearly to 5.0 % by year 2028). What range of prices for Nike stock is consistent with these forecasts? The range of prices will be Highest price per share: $ (Round to the nearest cent)
Chapter13: Capital Structure Concepts
Section: Chapter Questions
Problem 8P
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5% of any increases in sales, and capital expenditures to equal depreciation expenses. Nike also has $12.078.07 million in cash, $11,644 52 million in debt, 1,637 26 million shares outstanding, a tax rate of 20%, and a weighted average cost of capital of 9.0%
Consider the following data for Nike Inc.: In 2022, it had $47.530.00 million in sales with a 10.0% growth rate in 2023, but then slows by 1% to the long-run growth rate of 5.0% by 2028. Nike expects EBIT to be 16% of sales, increases in net working capital requirements to be
a. Suppose you believe Nike's initial revenue growth rate will be between 7.5% and 12.5% (with growth slowing linearly to 5.0% by year 2028) What range of prices for Nike stock is consistent with these forecasts?
b. Suppose you believe Nike's initial revenue EBIT margin will be between 15% and 17% 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 11.0% 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 7.5% and 12.5% (with growth slowing linearly to 5.0 % by year 2028). What range of prices for Nike stock is consistent with these forecasts?
The range of prices will be
Highest price per share: $ (Round to the nearest cent)
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