Suppose that in July 2013, Nike had sales of $25,313 million, EBITDA of $3,254 million, excess cash

Question:

Suppose that in July 2013, Nike had sales of $25,313 million, EBITDA of $3,254 million, excess cash of $3,337 million, $1,390 million of debt, and 893.6 million shares outstanding.

a. Using the average enterprise value to sales 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 sales multiples in Table 10.1?

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

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

 

NameMarket Capitalization ($ million)Enterprise Value ($ million)P/EPrice/BookEnterprise Value/SalesEnterprise Value/ EBITDA
Nike, Inc. 55,97054,02323.295.072.0315.71
Adidas AG23,10523,31732.333.061.2011.88
Puma AG4,3304,08570.561.960.969.34
Wolverine World Wide2,9103,98137.64.131.229.28
Steven Madden, Ltd.2,3202,14018.43.681.7410.70
Deckers Outdoor Corp.1,9901,92316.742.671.368.73
Crocs, Inc.1,4701,24011.462.41.106.74
Skechers U.S.A.1,3401,21367.411.540.7818.16
Weyco Group30132516.531.711.119.69
R. G. Barry Corp.19717414.922.311.196.44
Rocky Brands, Inc.11313212.460.890.586.61


Average29.842.441.129.76


Maximum136%70%55%86%


Minimum-62%-63%-48%-34%
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Fundamentals Of Corporate Finance

ISBN: 9780133507676

3rd Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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