Estimating Terminal Value: When creating a discounted cash flow valuation, analysts typically need to figure out a
Question:
Estimating Terminal Value: When creating a discounted cash flow valuation, analysts typically need to figure out a company's terminal value. This estimate can be prepared in three different ways: (1) by applying a multiple to earnings, revenues, or book value; (2) by assuming the firm's assets will be liquidated in the terminal year; and (3) by assuming the free cash flows will rise at a stable growth rate indefinitely. What is your estimate of Nike's terminal value using each of these methods? I'm not sure how to respond to this question. Please assist me in solving this. The financial report link is provided below to aid in the question's development. I would be very grateful for your assistance.
https://www.sec.gov/ix?doc=/Archives/edgar/data/320187/000032018724000004/nke-20231130.htm
Expert Answer:
Thank you for providing the financial report link from Nike To estimate Nikes terminal value I will ... View the full answer
