Nike Case 1. Should Nike be held responsible for working conditions in foreign factories that it does not own‚ but where subcontractors make products for Nike? No‚ I do not believe Nike should be responsible for working conditions in foreign factories. I do believe that there should be working standards in place and adhered to but I do not believe that is Nike’s responsibility. Nike is a business in order to run a successful business one must abide by good business practices including respecting
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Case Study: The Nike Sweatshop Debate � PAGE * Arabic �1� Case Study: The Nike Sweatshop Debate Established in 1972 by former University of Oregon track star Phil Knight‚ Nike is one of the leading global designers and marketers of athletic shoes and apparel. The organizations "swoosh" logo and "Just Do It!" marketing phrase are among the most recognizable logos in history. Nike has annual revenues of $15 billion and sells its products in over 140 countries. The corporation does not manufacture
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NIKE‚ INC.: COST OF CAPITAL On July 5‚ 2001‚ Kimi Ford‚ a portfolio manager at NorthPoint Group‚ a mutual-fund management firm‚ pored over analysts ’ write-ups of Nike‚ Inc.‚ the athletic-shoe manufacturer. Nike ’s share price had declined significantly from the beginning of the year. Ford was considering buying some shares for the fund she managed‚ the NorthPoint Large-Cap Fund‚ which invested mostly in Fortune 500 companies‚ with an emphasis on value investing. Its top holdings
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that has higher returns. In this case‚ I will first address the issues with Cohen’s calculation‚ and then analyze an new WACC to decide whether we should invest in Nike Inc. Many issues should be addressed regarding Joanna Cohen’s WACC calculation. First‚ to calculate the debt cost of capital‚ Cohen divided the total interest expense by the company’s average debt balance. This is an issue because she did not take into account the current yield on publicly traded Nike debt. Another issue that should
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analysis assumes Nike debt is trading at par – it is not ▪ Equity should be based on market value‚ not book value ▪ Hence total will be based on market cap.‚ not balance sheet ▪ Her debt cost is wrong ▪ She should use the current or projected cost rather than a historic one ▪ i.e. use a Bloomberg terminal (other terminals are available) to research yields on debt of the same credit rating as Nike ▪ It is unlikely Nike has a cost of
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The Nike Corporation is the world’s leading supplier of athletic shoes and apparel. The company takes its name from the Greek goddess of victory‚ and has fulfilled its reputation of being victorious in the sporting good industry for over a decade. For several organizations Nike had become a symbol of the evils of globalization as the company became a target for accusations that products were manufactured in "sweatshops" using child labor‚ working excessive hours under hazardous conditions while being
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Nike Case Questions 1. In the United States‚ what is Nike’s: a) Brand image‚ and b) sources of brand equity? a) In the United States‚ Nike’s brand image is built on being a high-performance‚ innovative and aggressive brand. The company associates the brand with top athletes through sponsorships. Since inception‚ Nike has placed performance as a top priority for the brand. Through designing high performance shoes and apparel‚ as well as sponsoring high-profile athletes and teams the brand
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NIKE‚ INC.: COST OF CAPITAL Professor Meiberger By Sebastian Gomez Team 5 Cohort: Front The portfolio manager for NorthPoint Group‚ Kimi Ford was deciding if she should pitch in and draw Nike within NorthPoint Large-Cap Fund. Nike‚ which did not have the strongest fiscal year results in 2001‚ was implementing new strategies to heighten its revenue and income. Kimi Ford‚ after having carefully read reports by analyst‚ and their input within this publicly traded company decided to emphasize
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ID: 4230485 CASE STUDY: Nike writes the future for soccer Nike is one of the renowned sports brands in the world. In 2010‚ Nike introduced their “Nike writes the future” commercial campaign. This was aired for the Soccer world cup 2010. Even though Adidas was the sole sponsor for this event‚ Nike introduced this 3-minute advertisement as a rival company. Nike soccer build their brand not only through their advertisements but also with public relations‚ sponsorships and innovations. Nike engaged young
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we used market value based on the share price of Nike on July 5‚ 2001and number of shares outstanding‚ which resulted in the weights of debt and equity of 10.2% and 89.8% respectively (see Exhibit 2). Cost of Debt: Cost of debt was calculated by Ms. Cohen by finding the historical interest rate of 2.7% and tax rate of 38%. We agree with her estimation of the tax rate of 38%‚ but calculated a cost of debt of 7.17% based on the market price of Nike bonds and finding their yield to maturity (see Exhibit
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