Question
In: Finance
Suppose that in July 2013, Nike Inc. had EPS of $2.61 and a book value of...
Suppose that in July 2013, Nike Inc. had EPS of $2.61 and a book value of equity of $12.52 per share.
p/e | price/book | enterprise value / sales | enterprise value/EBITDA
AVG: 29.84 | 2.44 | 1.12 | 9.76
MAX: +136% | +70% | +55% | +86%
MIN: -62% | -63% | -48% | -34%
a. Using the average P/E multiple from the table above, estimate Nike's share price.
b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above?
c. Using the average price to book value multiple in the table above, 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 the table above?
Solutions
Expert Solution
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Answer:
a)
= 2.61 * 29.84 = 77.88
b)
= 77.88 *(1.36) = 183.66
= 77.88(1-0.62) = 29.57
c)
= 12.52 * 2.44 = 30.55
d)
= 30.55 *(1.7) = 51.93
= 30.55 *(0.37) = 11.30
Share Price = [EPS Average ]
Share Price Highest Range = [Share Price*(1+ Maximum Range)]
Share Price Lowest Rang = [Share Pricex(1+Minimum Range)]
Share Price = Book Value of Equity < Price Average]
Share Pricelighest Range = [Share Price*(1+ Maximum Range)]
Share Price Lovestrang = [Share Pricex (1+Minimum Range)]
jeff jeffy answered 1 year agoRelated Solutions
Suppose that in July 2013, Nike Inc. had EPS of $2.45 and a book value of...
Suppose that in July 2013, Nike Inc. had EPS of $2.45 and a
book value of equity of $11.78 per share.
StartFraction Upper P Over Upper E EndFraction
P
E
StartFraction Price Over Book EndFraction
Price
Book
StartFraction Enterprise Value Over Sales EndFraction
Enterprise Value
Sales
StartFraction Enterprise Value Over EBITDA EndFraction
Enterprise Value
EBITDA
Average
29.84
29.84
2.44
2.44
1.12
1.12
9.76
9.76
Maximum
plus
+
136
136%
plus
+
70
70%
plus
+
55
55%
plus
+
86...
Suppose that in July 2013, Nike Inc. had EPS of $2.36 and a book value of...
Suppose that in July 2013, Nike Inc. had EPS of $2.36 and a
book value of equity of $13.27 per share.
P/e
Price/Book
Enterprise Value/Sales
Enterprise Value/EBITDA
Average
29.84
2.44
1.12
9.76
Max
+ 136%
+ 70%
+55%
+86%
Min
-62%
-63%
-63%
- 34%
a. Using the average P/E multiple from the table above,
estimate Nike's share price.
b. What range of share prices do you estimate based on the
highest and lowest P/E multiples in the table above?...
In July 2013, Nike had EPS of $2.52 and a book value of equity of $12.48...
In July 2013, Nike had EPS of $2.52 and a book value of equity
of $12.48 per share.
a. Using the average P/E mulitple in Table 2, 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 2?
c. Using the average price-to-book value mlutiple in Table 2,
estimate Nike's share price.
d. What range of share prices do you estimate based on the
highest and lowest...
Suppose that in July 2013, Nike Inc. had sales of $ 25 comma 245 million, EBITDA...
Suppose that in July 2013, Nike Inc. had sales of $ 25 comma
245 million, EBITDA of $ 3 comma 259 million, excess cash of $ 3
comma 333 million, $ 1 comma 395 million of debt, and 894.1
million shares outstanding. StartFraction Upper P Over Upper E
EndFraction StartFraction Price Over Book EndFraction StartFraction
Enterprise Value Over Sales EndFraction StartFraction Enterprise
Value Over EBITDA EndFraction Average 29.84 2.44 1.12 9.76 Maximum
plus136% plus70% plus55% plus86% Minimum minus62% minus63%
minus48%...
Suppose that in July? 2013, Nike Inc. had sales of $25,217 million, EBITDA of $3,247 million,...
Suppose that in July? 2013, Nike Inc. had sales of $25,217
million, EBITDA of $3,247 million, excess cas of 3,337 million,
$1,383 million of debt, and 901.2 shares outstanding
StartFraction Upper P Over Upper E EndFractionPE
StartFraction Price Over Book EndFractionPriceBook
StartFraction Enterprise Value Over Sales EndFractionEnterprise
ValueSales
StartFraction Enterprise Value Over EBITDA EndFractionEnterprise
ValueEBITDA
Average
29.84
2.44
1.12
9.76
Maximum
plus+136%
plus+70%
plus+55%
plus+86%
Minimum
minus?626%
minus?63%
minus?48?%
minus?34%
a. Using the average enterprise value to sales
multiple in...
Stewart Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 162,500...
Stewart Inc.'s latest EPS was $3.50, its book value per share
was $22.75, it had 162,500 shares outstanding, and its
debt-to-assets ratio was 46%. How much debt was outstanding?
A company has an EPS of $2.40, a book value per share of $24.24,and a...
A company has an EPS of $2.40, a book value per share of $24.24,
and a market/book ratio of 2.1×. What is its P/E ratio? Do not
round intermediate calculations. Round your answer to two decimal
places.
A company has an EPS of $2.40, a book value per share of $26.40, and a...
A company has an EPS of $2.40, a book value per share of $26.40,
and a market/book ratio of 1.3×. What is its P/E ratio? Do not
round intermediate calculations. Round your answer to two decimal
places.
_____
A firm has a profit margin of 5.5% and an equity multiplier of
1.6. Its sales are $260 million, and it has total assets of $78
million. What is its ROE? Do not round intermediate calculations.
Round your answer to two decimal...
Suppose the comparative balance sheets of Nike, Inc. are presented here. Nike, Inc. Condensed Balance Sheet...
Suppose the comparative balance sheets of Nike,
Inc. are presented here.
Nike, Inc.
Condensed Balance Sheet
May 31
($ in millions)
2020
2019
Assets
Current Assets
$9,600
$8,830
Property, plant, and equipment (net)
2,000
1,900
Other assets
1,500
1,700
Total assets
$13,100
$12,430
Liabilities and Stockholders' Equity
Current Liabilities
$3,240
$3,320
Long-term liabilities
1,200
1,340
Stockholders’ equity
8,660
7,770
Total liabilities and stockholders' equity
$13,100
$12,430
(a) Prepare a horizontal analysis of the balance
sheet data for Nike, using 2019...
Suppose the comparative balance sheets of Nike, Inc. are presented here. Nike, Inc. Comparative Balance Sheets...
Suppose the comparative balance sheets of Nike,
Inc. are presented here.
Nike, Inc.
Comparative Balance Sheets
May 31
($ in millions)
2020
2019
Assets
Current assets
$ 9,379
$ 8,300
Property, plant, and equipment (net)
1,836
1,700
Other assets
1,536
1,600
Total assets
$12,751
$11,600
Liabilities and Stockholders’ Equity
Current liabilities
$ 3,267
$ 3,300
Long-term liabilities
1,358
1,400
Stockholders’ equity
8,126
6,900
Total liabilities and stockholders’ equity
$12,751
$11,600
(a)
Prepare a horizontal analysis of the balance sheet data...
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