Risk Free Rate 3%

Market Return 8%

ERP = Market return Rf = 5%

Perpetuity Growth Rates

Dividend Growth Rate 3%

FCFF Growth Rate 3%

FCFE Growth Rate 3%

Tax rate 20%.

1. Assuming that the market risk premium is 5% and the risk free rate is 3%. What is NIKE's weighted average cost of capital?

2. NIKE's P/E ratio using 2022 earnings per share estimate and current stock price is closest to: (Hint: check the stock price as of today)

3. Companies in the Footwear & Accessories Industry trade at an average P/E ratio of 35. NIKE's implied share price using 2022 earnings per share estimate is closest to?

4. What is the FCFF in 2024 if the marginal tax rate is 20%?

5. What is the present value of the discrete period FCFF?