Nike

Table of Contents

Chapter 1: Summary ................................................................................................................... 2 Chapter 2: Introduction ............................................................................................................... 3 Chapter 3: Analysis ..................................................................................................................... 5 3.1 Cost of Capital................................................................................................................... 5 3.2 Weight of equity and debt .................................................................................................. 7 3.3 Cost of Equity ................................................................................................................... 8 3.3.1 Capital asset pricing model (CAPM) ........................................................................... 8 3.3.2 Dividend-discount model (DDM) ................................................................................ 9 3.3.3 Earning-capitalization ratio ....................................................................................... 10 3.4 Cost of Debt .................................................................................................................... 12 3.5 WACC Comparison........................................................................................................... 14 3.6 Difference between our calculation and Joanna Cohen ..................................................... 16 Chapter 4: Conclusion ............................................................................................................... 17 Chapter 5: References ............................................................................................................... 18

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Chapter 1: Summary In this case, Nike Inc. had held an analysts’ meeting to disclose its fiscal year 2001 result. However, in...