Nike, Inc.

Case Overview Nikes share price had declined remarkablely from the start of the year. Since 1997, Nikes taxations had plateaued at or so $9 billion, while net income had break from almost S800 million to $580 million. Nikes commercialize share in U.S. athletic shoes had fallen from 48 percent in 1997 to 42 percent in 2000. In addition, new-made supply-chain issues and the adverse way out of a sacrosanct dollar had negatively affected revenue. centering revealed plans to address both top-line exploitation and operating performance. To boost revenue, the smart set would develop more(prenominal) athletic-shoe products in the mid-priced segment that it had overlooked in young years. Nike also think to push its apparel line, which, under the recent leadership of fabrication veteran Mindy Grossman had performed extremely well. On the apostrophize side, Nike would exert more effort on expense control. Finally, fraternity executives reiterated their long-term revenue ha rvest-time targets of 8-10 percent and earnings-growth targets of above 15 percent. Analysts reactions were mixed. nearly ruling the financial targets too aggressive: others saw significant growth opportunities in apparel and in Nikes international businesses. let on Issues Nike was over wanted at its menstruum share price of $42.09. Nike was under valued at give notice rates below 9.4 percent.

In format to build cleared guidance to reveal their strategies, Joanna Cohen must(prenominal) estimate Nikes cost of jacket. The enigma is Joanna Cohen was mistaken in astute the cost of debt using historical inf ormation. We must recalculating the cost of ! debt and find out WACC based on our calculation. We must turn to market yields to cipher the cost of debt. Cost of Capital The cost of capital acts as a link between the firms long-term coronation decisions and the riches of the owners as determined by investors in the market place. It is the magic trick number that is... If you want to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper