Suppose that in April 2019, Nike had EPS of $2.57 and a book value of equity of $6.23 per share.
a. Using the average P/E 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 P/E multiples in Table 10.1?
c. Using the average price-to-book value 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 price to-book value multiples in Table 10.1? 

Data from Table 10.1

Transcribed Image Text:

Name Nike, Inc. Adidas AG Under Armour Puma AG Skechers U.S.A. Wolverine World Wide Steven Madden, Ltd. Rocky Brands, Inc. Market Capitalization ($ million) 134,210 50,885 9,219 9,110 5,452 3,283 2,943 189 Enterprise Value ($ million) 132,775 49,475 8,862 9,538 5,185 3,280 2,068 179 Average Maximum Minimum P/E 33.22 28.69 NM 43.42 18.04 17.83 22.84 13.13 23.99 81% -45% Price/Book 13.68 6.95 4.71 9.24 6.76 21.89 1.45 1.24 7.46 193% -83% Enterprise Value/Sales 3.65 1.97 1.66 4.26 3.13 3.01 0.44 0.71 2.17 96% -80% Enterprise Value/ EBITDA 25.44 14.81 18.82 33.70 26.45 34.53 3.78 7.78 19.98 73% -81%