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Displayed below is the problem I'm having trouble with, please help me out! Finance 321-3 #11990 Fall 2018 1017! 3:19PM Quiz: Chapter 10 Quiz Time

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Displayed below is the problem I'm having trouble with, please help me out!

image text in transcribed
Finance 321-3 #11990 Fall 2018 1017"! 3:19PM Quiz: Chapter 10 Quiz Time Rsmalnlng:l:l0:240li submlloulz This Quesnn: 1 pl 4 e of 1a (9 complele) v p This ain't.- 1!) pts posslble i} CnllilI'lEl die (allowing dala ini Nike Inc in 2003 ll had 519,100 mlllinrl in sales with a 10% growth rile an0 ID, hill (lien slows by 1% in the lung-lungmwlh rain nl5% by 2015 Nike expects EBIT tube 10% nisales, incieaseEin nelvmrh'iig capilaliequiiememslobe 10% Many increases in sales, and Capital expenditures") equal depreciation expenses Nike also has 52mm milli in cask, 532 million in debb 486 milliun Shara oulsiandlng, a lax iaLE oi 24%, and a weinged average roslol napiial oi 111% .1. Suppose you believe Nike's Ill l revenue gromr. rare will be bemeen 7% and 11% (with grown. slowing linearly to 5% by year 2015). What range oi plices lor Nike stock is consistent wilh mese forecasts" b. SupanE yllu believe Nikn's initial ie'llnllue EBIT maigiri will be heMeEll 9% and 1 1% iii sales Whal rangE Di priDes for Nike slock is canslslenl wlIII Ihase hiecasIS'Z c. Suppose you believe Nike's welnged average Casi oi eapilal is beiween a 5% and 12% Whal range oi prices in Mike sleek Ls oonslslenl will. inese iorecasisi .1. eral range oi slack prices is consisiem ii you vary me esn'males as in paris 1a). 1b), and (cl simultaneously" n. Suppose you believe Nike's inil.al revenue growih role will be beiween 7% and 11% (will. gmwlii slowing linearly to 5% by year 2015) wnai range oi pliizes ior Nike slork is eonsorent wilh inese inieuasis" The range o1 priceswlll be: Highesl prioe share 3 (Raund Io me nearesi cem) Lam priee snare: s 7 [Rnurld lo ine nearesl eenl) b. Suppose you believe Nike's lniiial revenue EB/Tmaigin will he heMeeii 9% and 1 1% ill sales Whal range ul priDes for Nike slock is eanslsiem Wilt. inese hrecasE'Z The range ol priceswlll be Hignesi prioe per share: 5 lRound lo me nearesr cenl ) Lowest priee pershzm 5 (Rmmd lo me nearesl eenl) c. Suppose you believe Nike's welnged average Casi oi eapilal is beiween a 5% and 12% Whal range oi prices in Mike sleek Ls oonslslenl will. inese iorecasisi The range ol priceswlll be Highesi prioe per share: 5 (Raund lo me nearesl cam ) Lewes. prioe persl.are s (Rouno Io .l.e nearesi Cent) d. Cnmpule (he stuck prices wnen liie lnllial revenue gmwm begins a] 7%, Me EBIT is 9% ol sales' and me WACC is 12% Then cumpuie lne slack price when me iniiial revenue gmwlii begins at 1 1%, Me EBIT is 11% nisales_and1ne eompanyfs WACC is 9 5% eral is me range oi piiues under inese SDeiiarins? Tne mnge ol pncesvnll be Highesl prioe per share: 5 (Raund ta ll.e nearesl cenl] Lowest prioe persnare: 5 [Round is me nearesi cent] Enter youranswer In each oftrle answer boxes

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