Suppose that in July 2013, Nike Inc. had sales of $25,339 million, EBITDA of $3,258 million, excess cash of $3,335mil...
Suppose that in July 2013, Nike Inc. had sales of
$25,339 million, EBITDA of $3,258 million, excess cash of $3,335million, $1,383 million of debt, and 884.9 million shares outstanding.
|
P/E |
Price / Book |
Enterprise Value / Sales |
Enterprise Value / EBITDA |
|
|
Average |
29.84 |
2.44 |
1.12 |
9.76 |
|
Maximum |
+136% |
+70% |
+55% |
+86% |
|
Minimum |
-62% |
−63% |
-48% |
-34% |
a. Using the average enterprise value to sales multiple in the table above, estimate Nike's share price.
b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above?
c. Using the average enterprise value to EBITDA 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 enterprise value to EBITDA multiples in the table above?
Homework Answers
1.
=(1.12*25339+3335-1383)/884.9=34.2769578483445
2.
Lowest=(1.12*(1-48%)*25339+3335-1383)/884.9=18.882849587524
3.
Highest=(1.12*(1+55%)*25339+3335-1383)/884.9=51.9160402305345
4.
=(9.76*3258+3335-1383)/884.9=38.1399932195728
5.
Lowest=(9.76*(1-34%)*3258+3335-1383)/884.9=25.922401175274
6.
Highest=(9.76*(1+86%)*3258+3335-1383)/884.9=69.0433142727992
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