Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose that in May 2010, Nike Inc. had EPS of $3.69 and a book value of equity of $19.12 per share. Use the multiples approach
Suppose that in May 2010, Nike Inc. had EPS of $3.69 and a book value of equity of $19.12 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 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 S. (Round to the nearest cent.) The lowest price will be c. Using the average price to book value multiple in the table above, estimate Nike's share price case will be S(Round to the nearest cent Round to the nearest cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started