Consider the following data for Nike. Nike had sales of

$25,300 million in 2012. Nike expects its sales to grow at a rate of 10% in 2013 but then slow by 1% to the long-run growth rate that is characteristic of the apparel industry, 55%, by 2018. Based on Nike's past profitability and investment needs, you expect 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$3.3 billion in cash, $1.2 billion in debt, 893.6 million shares outstanding, a tax rate of 24%, and a WACC 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 2018).

What range of prices for Nike stock is consistent with theseforecasts?

b. Suppose you believe Nike's initial revenue EBIT margin will be between

9% and 11% of sales. What range of prices for Nike stock is consistent with these forecasts?

c. Suppose you believe Nike's WACC is between 9.5% and 12%.

What range of prices for Nike stock is consistent with theseforecasts?

d. What range of stock prices is consistent if you vary the estimates as in parts a, b, and c simultaneously?