User Account

All Pages

Find the expected return on nike shares

Assignment Help Accounting Basics
Reference no: EM131624841

Exercise - Uncovering expected returns from RIV

As of the end of fiscal year 2010, the consensus analyst earnings per share forecasts for Nike Inc. for the next two years (2011 and 2012) are $4.29 and $4.78, respectively. In its 2010 annual report, Nike reported earnings per share of $3.93, book value per share of $20.15, and dividends per share of $1.06.

Assume that from 2013 to 2015, Nike's earnings per share is expected to grow from its 2012 base at 11% rate. The dividend payout ratio is expected to remain at its 2010 level. The residual earnings (RE) is expected to grow at 4% annual rate after 2015.

Required - The market price of a share of Nike's equity as of the end of fiscal year 2010 was $74. Find the expected return on Nike's shares as implied by the market price.

Reference no: EM131624841

Questions Cloud

Show the journal entries required at the time of disposal : On June 30, 2012, the company sold old office equipment for $24,000. Show the journal entries required at the time of disposal
Based on relative sales values allocate joint costs : Based on relative sales values at the split-off point, allocate Joint costs to Products A and B.
How each of the risks you identified could affect mcdonald : Internal Auditors in the Fast-Food Industry. Internal auditors perform risk-based audits that go beyond the risks of the financial statements.
Consider a potential gap in the literature : Consider a potential gap in the literature that is emerging from your ongoing reading in your field of interest including the two specific articles.
Find the expected return on nike shares : The market price of a share of Nike's equity as of the end of fiscal year 2010 was $74. Find the expected return on Nike's shares as implied by the market price
Explain kinds of uneconomical or inefficient practices : CPA Involvement in an Expanded-Scope Audit. A public accounting firm has been engaged to audit a local food distribution program funded by the U.S. Department.
How much mark should be willing to pay for the annuity : Calculate how much Mark should be willing to pay for the annuity if he can invest his funds at 7%
Identify the risk factors associated with the health issues : Identify health protective behaviors to prevent the disease, including individual and interpersonal factors that can prevent the disease.
Write suggested procedures for each case in definite terms : Selection of Effective Extended Procedures. The following lettered items are some "suspicions," and you have been requested to select some effective procedures.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd