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.

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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LL R You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity, Inc.), both of which operate in the same industry, LotsofDebt, Inc. finances its $36.00 million in assets with $33.00 million in debt and $3.00 million in equity. LotsofEquity, Inc finances its $36.00 million in assets with $3.00 million in debt and $33..00 million in equity. Calculate the debt ratio. (Round your answers to 2 decimal places.) LotsofDebt, Inc. LotsofEquity. Ino Calculate the equity multiplier. (Round your answers to 2 declmal places.) Equity multiplier LotsofDebt, Inc. LotsofEquity. Ine. Calculate the debt-to-equity. (Round your answers to 2 declmal places.) Debt-to-equity LotsofDebt. Inc. LotsofEquity, Inc. Mc <. Prev MED Type here to search DOOH F2 F4 F5 F7 F10 F11 F12 PrtScr 8- & 23 24 2 ) 4. 5. 9. 7. 8. %3D } 1
Question # 2: Which of the following statements is CORRECT? a. If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction. b. If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction. c. The IPO market is an example of a primary market. d. Question # 3: Which of the following statements is CORRECT? a. Capital market instruments include both long-term debt and common stocks. b. An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birthday gift. c. The NYSE does not exist as a physical location; rather, it represents a loose collection of dealers who trade stocks electronically. d. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.…
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Could you help me figure out the cost of equity and WACC for a company based on the information below? This is for a scenario where Kelvin, who’s just been appointed as the financial manager of MetaGreen, wants to apply his understanding of the cost of capital from his finance course to make sound financial decisions. Here’s the company information: Company Listing and Stock Info: Listed on the stock exchange Common stock market value: $2,080,000 Beta: 2 Market risk premium: 4% Risk-free rate: 3% Cost of Capital Components: Cost of debt: 7% Cost of preferred stock: 8% Tax rate: 34% Preferred Stock Details: 40,000 preferred shares outstanding Market price of preferred stock: $34 per share Bond Info: Bonds' total market value: $560,000 Could you show me how to use CAPM to find the cost of equity and then calculate the weighted average cost of capital (WACC) for the company?
Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table. Number of Share Market Capitalization ($ millions) 1547.66 (millions) Stock Price = Callaway Golf (ELY) Alaska Air Group (ALK) Yum! Brands (YUM) Caterpillar Tractor (CAT) Microsoft (MSFT) $ 16.36 $ 61.96 $ 85.13 $597.63 $ 91.27 94.6 123.4 7645.86 $ 28,305.73 $ 88,090.66 332.5 147.4 7,705.0 $703,235.35 a. The price of Yum! Brands stock has risen to $185. What is the market value of the firm's equity if the number of outstanding sha does not change? (Enter your answer in billions rounded to 3 decimal places.) O Answer is complete but not entirely correct. Market value $33,114.270 8 b. The rating agency has revised Catalytic Concepts' bond rating to BBB (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded to 1 decimal place.) Interest rate Ac Graw Hill 1 of 8 Prev Next > MacBook Air…
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David's Watersports Firm is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $16.85 per share for 550,000 shares. The company will receive $15.40 per share and will incur $180,000 in registration, accounting, and printing fees. A. What is the spread on this issue in percentage terms? What are the total expenses of the issue as a percentage of total value (at retail)? B. If the firm wanted to net $15.99 million from this issue, how many shares must be sold?