K 2.

Adidas' mission is to be the best sports brand in the world. in 2021, the company had revenues of EUR 19.8 billion and net income of EUR 432 billion, giving earnings per share EPS of EUR 2.15. Also in 2021, the company paid a dividend of EUR 3.00 per share. you are considering investing in Adidas common stock and, based on your analysis, you have determined that an 9% required return is appropriate.

QA. you look at the price to-earnings P/E ratios of reebok, puma, skecjers, Nike and other Adidas competitors and find that the average P/E ratio for these companies is 50. what is the value of Adidas stock based on the P/E multiples approach?

Q.b. On May 3, 2022 Adidas common stock was trading at a price of EUR 260. If you trust in the Quality of uyour assumptions and calculations above, should you invest in Adidas at the current price ? why?