investment. I. Objective The objective of this report is to give recommendation for Kimi Ford whether North Point Group should invest on Nike or not. The recommendation is based of Nike’s Cost of Capital. II. Analysis * Cost of Debt Joanna mistakenly used the historical data in estimating the cost of debt. She divided the interest expenses by the average balance of debt to get 4.3% of before tax cost of debt. We believed the cost of debt should be estimated by yield to maturity of
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small changes in assumptions of its formula. 2. What is your estimate of Nike’s WACC? What mistakes to Joanna Cohen make in her analysis? Which method is best for calculating the cost of equity? I think that Joanna Cohen makes several mistakes while calculating Nike’s WACC. First mistake is her calculation of debt which should be measured according to the market value‚ not the book value. Joanna calculated debt using the book values of current portion of long-term debt‚
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firm as a whole. It is important to calculate a firm’s cost of capital in order to determine the feasibility of a particular investment for a firm. I do not agree with Joanna Cohen’s WACC calculation. She calculated value of equity‚ value of debt‚ cost of equity‚ and cost of debt all incorrectly. For value of equity‚ Joanna simply used the number stated on the balance sheet instead of multiplying the current stock price by the number of outstanding shares. The correct calculation is $42.09 x 271
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The contrast between the idea of being silent and being vocal is evident in the interviews. For example‚ Joanna decided to skip the question requesting her opinion on same-sex marriage‚ yet she was vocal about the discrimination that LGBTQ community has faced and continues to face‚ albeit to a lesser extent: “…I think they’re gaining access to a lot of rights that were denied to them in the past. They’re not being discriminated against them as much as before.” This pattern of silence and vocality
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Apparently‚ the issue of Nike’s case is to control and check the calculation cost of capital done by Joanna Cohen who is the assistant of a portfolio manager at NorthPoint Group. But I am willing to tell you that it can be a complex case in which we can doubt about sensitivity analysis done by Kimi Ford (portfolio manager) too. Because her assumptions such as Revenue Growth Rate‚ COGS / Sales‚ S &A / Sales‚ Current Assets / Sales‚ and Current Liability / Sales have been adopted from previous income
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cover several aspects of communication‚ including hearing versus listening‚ nonverbal communication‚ and relationships. A brief overview of the film Kramer Versus Kramer starts out by the main character Ted coming home late from work and his wife Joanna tells him that she is leaving him. She leaves Billy (their son) with Ted‚ and goes off on her own. Ted knows next to nothing about their son Billy‚ but through the course of the movie you see him change from a working man to a loving father. There
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The Donor Services Department Case-Discussion Questions March 9‚ 2004 1. What was Joanna Reed’s diagnosis of the situation in the donor services department? Sam Wilson was an American who ran the Guatemala branch of a U.S. aid agency. Joanna Reed’s diagnosis of the situation in his donor services department found many problems. LEADERSHIP - The biggest problem was that there was no leader who was accountable. Elena was the supervisor but she had no control. She also had no leadership
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are assessed. These milestones include physical‚ emotional‚ cognitive‚ and social milestones. Although there may be certain age categories for each milestone‚ it is important to understand that every child is one of a kind. I interviewed my sister‚ JoAnna‚ who is an Exceptional Education teacher in Tampa‚ FL. One of her students‚ Brianna‚ is a 13-year-old female with Attention Deficit Hyperactivity Disorder (ADHD). She is a 7th grade student that has reached many of her developmental milestones but
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(Assumption: In this calculation‚ the growth rates significantly higher than 20% and negative figure have been ignored.) C8: Using CAPM: KE’=3.2%+0.91*5.5%=8.21% C9: Using DGM formula: P’=D1/ (KE’-g) =1.06*(1+8%)/(8.21%-8%)=$545 In Nike’s case‚ when Joanna Cohen calculated the WACC of Nike‚ she made several mistakes and led to a wrong estimate of the cost of capital. The first mistake comes to the book value of equity used in calculating WD. Nike became a publicly traded company since December 2‚ 1980
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Corporate Finance Nike‚ INC: Cost of capital 1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? Definition of WACC (Weighted Average Cost of Capital): WACC is basically the average of the cost of finance (debt and equity). Since a company’s assets can be financed by debt or equity‚ WACC can show the averages of the costs involved in the sources of financing. These costs are then weighted
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