econ the stock market

· Risk Free Rate   3%

· Market Return  8%

· ERP = Market return – Rf = 5%

· Perpetuity Growth Rates

· Dividend Growth Rate   3%

· FCFF Growth Rate  3%

· FCFE Growth Rate  3%

· Tax rate 20%.

Question 11 pts

What is the average annual expected growth rate in Sales between 2021 and 2025?

Group of answer choices

10.4%

8.3%

9.7%

6.0%

 

Flag question: Question 2

Question 21 pts

Sales in 2023 are expected to be:

Group of answer choices

$34,637 million

$67, 904 million

$72, 543 million

$ 52,156 million

 

Flag question: Question 3

Question 31 pts

What is the average annual expected growth rate in Net Income between 2021 and 2025?

Group of answer choices

8.37%

12.45%

24.62%

16.03%

 

Flag question: Question 4

Question 41 pts

Net Income in 2022 are expected to be:

Group of answer choices

$3,134 million

$4,372 million

$7,904 million

$ 6,200 million

 

Flag question: Question 5

Question 51 pts

The Change in Net Working Capital in year 2022 is closes to:

Group of answer choices

$340 million

$590 million

$6,439 million

$3,259 million

 

Flag question: Question 6

Question 61 pts

Total capital expenditures for 2023 is closes to:

Group of answer choices

$3,425 million

$402 million

$734 million

$1,004 million

 

Flag question: Question 7

Question 71 pts

Assuming that NIKE has $3.4 billion in long term debt.

Issue	Amount $(Mil)	Maturity Date	Yield To Maturity
NIKE 4.375%	750	1/15/2025	4.25%
NIKE 5.7%	800	1/15/2035	6.45%
NIKE 5.4%	800	1/15/2033	5.93%
NIKE 3.875%	500	12/1/2040	3.47%
NIKE 6.7%	550	12/1/2036	6.96%

What is the weighted average cost of debt (average pre-tax cost of debt)?

Group of answer choices

3.72%

5.49%

4.23%

2.13%

 

Flag question: Question 8

Question 81 pts

Assuming that NIKE has $3.4 billion in long term debt.

Issue	Amount $(Mil)	Maturity Date	Yield To Maturity
NIKE 4.375%	750	1/15/2025	4.25%
NIKE 5.7%	800	1/15/2035	6.45%
NIKE 5.4%	800	1/15/2033	5.93%
NIKE 3.875%	500	12/1/2040	3.47%
NIKE 6.7%	550	12/1/2036	6.96%

Assuming the marginal tax rate is 20%, what is the company's after-tax cost of debt?

Group of answer choices

9.2%

4.38%

1.2%

7.4%

 

Flag question: Question 9

Question 91 pts

The market has a 8 percent expected rate of return and the risk free rate is 3%. What is the market risk premium?

Group of answer choices

5%

6%

3%

4%

 

Flag question: Question 10

Question 101 pts

The market has a 8 percent expected rate of return and the risk free rate is 3%. What is the required rate of return for NIKE using the CAPM?

Group of answer choices

4.05%

5.75%

9.25%

8.75%

 

Flag question: Question 11

Question 111 pts

What is the weight of the debt as it relates to the firm's weighted average cost of capital?

Group of answer choices

67%

44%

73%

23%

 

Flag question: Question 12

Question 121 pts

What is the weight of the common stock as it relates to the firm's weighted average cost of capital?

Group of answer choices

23%

75%

56%

32%

 

Flag question: Question 13

Question 131 pts

Assuming that the market risk premium is 5% and the risk free rate is 3%. What is NIKE's weighted average cost of capital?

Group of answer choices

9.12%

4.42%

5.19%

6.83%

 

Flag question: Question 14

Question 141 pts

NIKE's P/E ratio using 2021 earnings per share estimate and current stock price is closest to:

Group of answer choices

93

10

2

50

 

Flag question: Question 15

Question 151 pts

Companies in the Footwear & Accessories Industry trade at an average P/E ratio of 55. NIKE's implied share price using 2021 earnings per share estimate is closest to?

Group of answer choices

$365

$51

$471

$174

 

Flag question: Question 16

Question 161 pts

What is the FCFF in 2021 if the marginal tax rate is 20%?

Group of answer choices

$3,520 million

$2,089 million

$9,705 million

$5,370 million

 

Flag question: Question 17

Question 171 pts

What is the FCFF in 2024 if the marginal tax rate is 20%?

Group of answer choices

$9,023 million

$5,370 million

$1,705 million

$2,520 million

 

Flag question: Question 18

Question 181 pts

What is the present value of the discrete period FCFF?

Group of answer choices

$35,693 million

$54,564 million

$43,290 million

$28,048 million

 

Flag question: Question 19

Question 191 pts

What is the FCFF terminal value in year 2025 if the long term growth rate is estimated to be 3%?

Group of answer choices

$302,990 million

$329,564 million

$130,453 million

$423,569 million

 

Flag question: Question 20

Question 201 pts

What is the present value of the FCFF terminal value?

Group of answer choices

$526,854 million

$130,596 million

$217,780 million

$342,542 million

 

Flag question: Question 21

Question 211 pts

What is the company value using the FCFF model?

Group of answer choices

$33,093 million

$322,203 million

$526,456 million

$245,828 million

 

Flag question: Question 22

Question 221 pts

What is the equity value if the market value of debt is $9,406 million?

Group of answer choices

$132,203 million

$236,442 million

$318,362 million

$434,386 million

 

Flag question: Question 23

Question 231 pts

What is the value of NIKE’s shares using the FCFF model if the company has 1,558 million shares outstanding?

Group of answer choices

$112.64

$151.75

$64.38

$310.32

 

Flag question: Question 24

Question 241 pts

The FCFE in 2021 is closest to?

Group of answer choices

$5,761 million

$9,795 million

$1,576 million

$2,720 million

 

Flag question: Question 25

Question 251 pts

What is the present value of the discrete period FCFE?

Group of answer choices

$96,974 million

$21,758 million

$34,564 million

$55,693 million

 

Flag question: Question 26

Question 261 pts

What is the FCFE terminal value in year 2025 if the long term growth rate in FCFE is assumed to be 3%?

Group of answer choices

$329,564 million

$230,453 million

$182,720 million

$243,569 million

 

Flag question: Question 27

Question 271 pts

What is the present value of the FCFE terminal value?

Group of answer choices

$120,127 million

$230,596 million

$242,542 million

$326,854 million

 

Flag question: Question 28

Question 281 pts

What is the equity value using the FCFE model?

Group of answer choices

$233,093 million

$141,885 million

$326,456 million

$422,203 million

 

Flag question: Question 29

Question 291 pts

What is the value of NIKE’s shares using the FCFE model if he company has 1,558 million shares outstanding?

Group of answer choices

$22.64

$164.38

$110.32

$91.07

 

Flag question: Question 30

Question 301 pts

What is the value of NIKE’s shares using the Dividend Discount Model if the company has 1,558 million shares outstanding and the long term growth rate in dividends is expected to be 3%?

Group of answer choices

$110.32

$24.66

$64.38

$82.64