Suppose that in July 2022, Nike had EBITDA of \($6,675\) million, excess cash of \($12,997 million,\) \($12,627\) million of debt, and 1573.8 million shares outstanding.

a. Using the average enterprise value to EBITDA multiple in Table 10.1, estimate Nike’s share price.

b. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in Table 10.1?

Table 10.1

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Name Nike, Inc. Market Capitalization ($ million) Enterprise Enterprise Value Value/ ($ million) P/E Price/Book EBITDA 169,857 1,69,487 26.98 10.42 23.8 Adidas AG 31,608 33,002 25.63 4.87 11.13 Under Armour 3,713 3,548 15.63 2.05 7.43 Puma AG 9,584 9,888 29.84 3.83 15.82 Skechers U.S.A. 5,575 6,342 7.41 1.63 8.51 Wolverine World Wide 1,615 2,576 41.67 2.70 23.04 Steven Madden, Ltd. 2,608 2,455 10.81 3.04 7.50 Rocky Brands, Inc. 247 520 10.74 1.21 9.08 Average (excl. NKE) 20.25 2.76 11.79