Both Nike and Adidas operate in the business of producing and selling they are considered to be rivals in this industry. Below is information about both firms Adidas Current stock price Number of shares outstanding Current level earnings $100 per share Current level of earnings 30 million $60 million Nike Number of shares outstanding 20 million $10 million You are interested in purchasing a stock of Nike. If you use a multiple valuation approach, what should be the appropriate stock price of Nike? Note: Please express the answer as a whole number. "$" is NOT required.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 89.2C
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Both Nike and Adidas operate in the business of producing and selling sports goods, and
they are considered to be rivals in this industry. Below is information about both firms
Adidas
Current stock
price
Number of
shares
outstanding
Current level
earnings
$100 per
share
Current level of
earnings
30 million
$60
million
Nike
Number of shares
outstanding
20
million
$10
million
You are interested in purchasing a stock of Nike. If you use a multiple valuation approach,
what should be the appropriate stock price of Nike?
Note: Please express the answer as a whole number. "$" is NOT required.
Transcribed Image Text:Both Nike and Adidas operate in the business of producing and selling sports goods, and they are considered to be rivals in this industry. Below is information about both firms Adidas Current stock price Number of shares outstanding Current level earnings $100 per share Current level of earnings 30 million $60 million Nike Number of shares outstanding 20 million $10 million You are interested in purchasing a stock of Nike. If you use a multiple valuation approach, what should be the appropriate stock price of Nike? Note: Please express the answer as a whole number. "$" is NOT required.
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