find the cost of capital (WACC) for NIKE. You can assume an equity risk premium of 4.72%.
Question:
find the cost of capital (WACC) for NIKE. You can assume an equity risk premium of 4.72%. Use the cost of debt of 2.06%. You can use their effective tax rate of 14% as of May 2021 LTM.
Please show the formula and calculations in excel.
NIKE, Inc. Class B (THIS) $149.59
Cost of Equity6.56%
3y Adjusted Beta1.08
Market Risk Premium4.72%
10y Risk Free Rate1.46%
Weight of Equity96.30%
Fully Diluted Market Cap245,306.1
Total Capitalization254,736.1
After Tax Cost of Debt1.77%
Cost of Debt2.06%
1 - Effective Tax Rate (3y Avg)0.86
Weight of Debt3.70%
Total Debt net ITM Convertible Debt9,430.0
Total Capitalization254,736.1
Cost of Preferred
Weight of Preferred0.00%
Preferred Equity net ITM Convertible Pfd 0.0
Total Capitalization254,736.1
Cost Management Measuring Monitoring And Motivating Performance
ISBN: 9781118168875
2nd Canadian Edition
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook