Favorite Brand Paper MKT/421 June 4, 2014 Nike Nike Inc. was first founded in 1964 as “Blue Ribbon Sports” by Bill Bowerman and Phil Knight. It wasn’t until 1971 that it was re-named “Nike” after the Greek winged goddess of victory, strength, speed, glory, and fame. The Nike “swoosh” is meant to represent the wings of the goddess Nike, as she was often depicted in mythology with. The iconic swoosh was created by Caroline Davidson, an advertising student
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Brand loyalty, ample capital, and broad based sourcing create an environment where the bigger companies such as Nike and Reebok have little trouble maintaining market share. Nike enjoys the largest share, with 42.3% of the nearly $8 billion market in the year 2000. Reebok was second with 11.9%, Adidas had 10.8%, and New Balance had 9.6% of the market. The remaining 25% must be divided among the numerous smaller companies fighting for a shot at survival. NIKE Corporation NIKE Corporation was incorporated
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History 4 Scope of international operations. 5 Capital structure. 5 Ratios. 6 Dividends 7 Recent stock performance. 8-9 SWOT Analysis 10-12 Final Thoughts 13-14 References 15 Appendixes 16 Abstract The purpose of this paper is to provide investors with comprehensive information on Nike, its financial health and activities, its strength and weaknesses, and whether Nike creates value to its shareholders. This paper will analyze Nike's capital structure, scope of international operations
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CASE 14: NIKE, INC.: COST OF CAPITAL What is WACC and why it is important to estimate a firm’s cost of capital? Do you agree with Joanna Cohan’s WACC calculation? What is WACC and why it is important? Do you agree with Joanna Cohan’s WACC calculation? WACC (Weighted average cost of capital) is the minimum return that a company must earn on existing asset base on satisfy its creditors, owners and other providers of capital WACC is important to estimate a firm’s cost of capital because: The
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concerned about whether or not to add Nike, Inc. shares into her fund Analysts had different opinion about the company prospects; Lehman Brothers suggested a strong buy while UBS and CSFB recommended a hold. She asked her assistant, Joanna Cohen, to calculate the company’s cost of capital precisely. On the report, Joanna Cohen used weighted average cost of capital (WACC) to calculate the cost of capital. The main issue of this case is the estimation of cost of capital, why it is important in the business
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Globalisation NIKE – just do it Introduction Nike, Inc. is an incorporated company that designs, develops and markets worldwide athletic footwear, apparel, equipment and accessories. Nike is the biggest seller of athletic footwear and athletic apparel in the world and creates designs for men, women and children. Nike employs both traditional and non-traditional distribution channels in almost 200 countries with primary market regions in the United States, Europe, Asia Pacific, and the Americas. Nike has
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NIKE, INC. COST OF CAPITAL Context: Estimating Cost of Equity with different methods. Compute WACC Nike’s current price per share= $ 42.09 Question: Is it undervalued or overvalued to make buy /sell decision? Forecasts for Cash flows, Dividend growth, EPS estimates for NIKE are given. Interest rate #’s, Betas, Book values on debt and equity are given. Also historical performance #s are given. At 12% WACC Nike is overvalued and hence sell decision; At 11.17% correct valuation; WACC
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Question 1 | The comparative balance sheets of Nike, Inc. are presented here. | NIKE INC. | Comparative Balance Sheets | May 31 | ------------------------------------------------- ($ in millions) | Assets | 2007 | 2006 | Current assets | $8,076 | $7,346 | Property, plant, and equipment (net) | 1,678 | 1,658 | Other assets | ------------------------------------------------- 934 | ------------------------------------------------- 866 | Total assets | -------------------------------------------------
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Determining the cost of equity and rate of return is an important financial principle. Company shareholders are able to make intelligent decisions when the information is readily available. This paper will describe three specific theories and models that yield the cost of equity. After providing a clear description of all three, I will focus on one particular model, the Capital Asset Pricing Model (CAPM), which is a simplistic approach to cost of equity. Then lastly, the CAPM will be applied
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manufacturers are the key suppliers. The market is dominated by large retail groups such as Foot Locker, Inc. Nike, Inc, Adidas AG, Finish Line, Inc. that hold a strong position in the market bargaining power over suppliers. Rivalry is the strongest between these large groups. The footwear is a basic necessity, so sales volumes are high what reduce buyer power. Much of the footwear has been produced in low-cost manufacturing locations, such as South-East Asia. Many domestic manufacturers in Western countries
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