Consider the following data for Nike Inc.: In 2009 it had $ 19 comma 200$19,200 million in sales with a 10% growth rate in 2010, but then slows by 1 % to the long-run growth rate of 55% by 2015. Nike expects EBIT to be 10% of sales, increases in net working capital requirements to be 10% of any increases in sales, and capital expenditures to equal depreciation expenses. Nike also has $2, 3002,300 million in cash, $32million in debt,486million shares outstanding, a tax rate of 24%, and a weighted average cost of capital of 10%.

a. Suppose you believe Nike's initial revenue growth rate will be between 7 %and 11 %(with growth slowing linearly to 55% by year 2015). What range of prices for Nike stock is consistent with these forecasts?

The range of prices will be:

Highest price share:

$____(Round to the nearest cent.)

Lowest price share:

$____ (Round to the nearest cent.)

b. Suppose you believe Nike's initial revenue EBIT margin will be between9 %and 11 %of sales. What range of prices for Nike stock is consistent with these forecasts?

The range of prices will be:

Highest price per share:

$____.(Round to the nearest cent.)

Lowest price per share:

$____(Round to the nearest cent.)

c. Suppose you believe Nike's weighted average cost of capital is between9.5%and12%.

What range of prices for Nike stock is consistent with these forecasts?

The range of prices will be:

Highest price per share: $____.(Round to the nearest cent.)

Lowest price per share: $____(Round to the nearest cent.)

d.Compute the stock prices when the initial revenue growth begins at 7 %the EBIT is 9%of sales, and the WACC is 12%. Then compute the stock price when the initial revenue growth begins at 11 %the EBIT is 11 %of sales, and the company's WACC is 9.5%.

What is the range of prices under these scenarios?

The range of prices will be:

Highest price per share: $_____(Round to the nearest cent.)

Lowest price per share:$___(Round to the nearest cent.)