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Suppose that in May 2010, Nike Inc. had EPS of $3.54 and a book value of equity of $19.04 per share. Use the multiples approach
Suppose that in May 2010, Nike Inc. had EPS of $3.54 and a book value of equity of $19.04 per share. Use the multiples approach to estimate Nike's value based on the following data from comparable firms given in Table 9.2 of the text: Average Maximum Minimum 18.39 +41% - 40% Price Book 2.27 +58% - 75% Enterprise Value Sales 1.02 + 64% -63% Enterprise Value EBITDA 8.72 +45% - 47% a. Using the average P/E multiple from the table above, estimate Nike's share price. b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? c. Using the average price to book value multiple in the table above, estimate Nike's share price. d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above? a. Using the average P/E multiple from the table above, estimate Nike's share price. Nike's share price for this case will Round to the nearest cent.) b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? Range of prices: The highest price will be (Round to the nearest cent.) The lowest price will be $ (Round to the nearest cent.) c. Using the average price to book value multiple in the table above, estimate Nike's share price. Nike's share price for this case will be Round to the nearest cent.) d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above? Range of prices: The highest price will be $ (Round to the nearest cent.) The lowest price will be $ . (Round to the nearest cent.)
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