Nike case study wacc

Joanna has undertaken an appropriate approach in calculating the after tax cost of debt, since debt is tax deductible. It is unlikely that the government will default, but inflation causes uncertain about the real rate of return.

Executive Summary Nike, Inc. It also helps predict risk would be happen with a company risk management. The technique used by Joanna is useful only to get some rough insight on what Nike is paying on its existing debt.

Multiple or Single Cost of capital? Because of arithmetic mean is better for one-year period estimated expected returns, while geometric mean is better for long-term period valuation. The interest rate at which a company can acquire new debt. The more appropriate cost of debt can be calculated by using data provided in Exhibit 4.

Inventory cost has increased steadily over the past three years and is now at the point where it is out weighing revenue.

how to calculate wacc from financial statements pdf

Recession d.

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Nike Case Analysis