The base year Nike inc. Revenue is 51217 millions, EBIT is 6201 millions, Capitalized research and development expenditures is 548 millions, depreciation is 703 millions, change in NWC is -502 millions, amortization is 156 millions, tax rate is 25%, and cost of capital is 9.73%.

Why Choose a Two-Stage FCFF Model?

Analyze the key assumptions used to construct the model? (e.g., length of high growth period, steady growth rate)

What is the process for estimating Nike inc.'s cost of capital and future cash flows?

The process of estimating the company's equity value per share based on the inputs and assumptions listed above?

Sensitivity analysis of the projected equity value to changes in the above assumptions?

Answer rating: 100% (QA)

AnswerThe twostage Free Cash Flow to Firm FCFF model is chosen for Nike Inc due to the companys expected nonconstant growth in the future This model a... View the full answer