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Calculate the breakeven ebit for the company

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Reference no: EM132801844

You are the Chief Financial Officer of Nike, Inc. and you are reviewing the company's capital structure. You are in the process of preparing a report for the CEO that addresses the following questions:

-Calculate the breakeven EBIT for the company?

-Determine whether the company has too little debt or too much debt based on your calculation of the breakeven EBIT.

-Explain why you have chosen to operate at the current level of debt in your capital structure rather than changing it based on your calculation of breakeven EBIT (be specific with the company and industry).

-What is the current return on equity for the company?

-Analyze the changes in the capital structure for the company over the last decade and explain trend.

-A consulting firm suggested that you should issue debt and buy back shares in the company to get to a capital structure that is 60% debt and 40% equity. What would be the return on equity at this capital structure?

-Would you consider operating at a 60/40 capital structure? Why or why not?

Please find the link to the financial report: https://s1.q4cdn.com/806093406/files/doc_financials/2020/ar/NKE-FY20-10K.pdf

Reference no: EM132801844

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