What does your analysis tell you about long-run growth rate

Assignment Help Finance Basics

Reference no: EM131487831

Question: Converting Analysts; Forecasts to a Valuation: Nike, Inc. (Medium) Nike reported book value per share of $15.93 at the end of its 2008 fiscal year. Analysts were forecasting earnings of $3.90 per share for 2009 and $4.45 for 2010, and were also forecasting a five-year growth rate in EPS of 13 percent per year. Prepare a five-year pro forma of earnings based on these forecasts and convert the forecasts to a valuation with the added forecast that residual earnings will grow at the GDP growth rate of 4 percent per year after 2013. Use a required return of 10 percent in your calculations. Table 5 .2 in this chapter will help you. Nike traded at $60 per share at the time. Based on your calculations, do you think Nike is reasonably priced? What does your analysis tell you about the long-run growth rate that the market is forecasting for Nike?

Reference no: EM131487831

Questions Cloud

Understand benefits of developing and implementation plan : Understand the benefits of developing and following an implementation plan.

Knowledge of us history : Based on the readings and your knowledge of U.S. history, which three events do you feel were most important in shaping the labor relations system?

Is the p-b ratio justified by the forecasted roce : Valuing Dividends or Return on Equity: General Motors Corp (Easy) In April 2005, General Motors traded at $28 per share on book value of $49 per share.

Benefits and limitations of approach for us labor movement : In a 2-3 page essay, discuss the benefits and limitations of this approach for the U.S. labor movement today.

What does your analysis tell you about long-run growth rate : Converting Analysts; Forecasts to a Valuation: Nike, Inc. (Medium) Nike reported book value per share of $15.93 at the end of its 2008 fiscal year.

Health care delivery system in the united states : Managed Health Care has significantly affected the Health Care Delivery system in the United States. In your own words, describe Managed Health Care.

Calculate the cost performance index : Using the following information, calculate the cost performance index and the schedule performance index.

Good leadership and effective leadership : What do you think is the difference between "good" leadership and "effective" leadership? Provide examples.

What is the revised forecast of return on common equity : Residual Earnings Valuation and Accounting Methods (Hard) Refer back to the valuation. In that proforma, an analyst forecast $388 million of earnings for 2013.

User Account

All Pages