Nike Wacc - 1068 Words

What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? 1.1 The definition of WACC Weighted average cost of capital(WACC), is a weighted-computational method of analyzing the cost of capital based on the whole capital structure of a firm. The result of WACC is the rate a firm use to monitor the application of the current assets because it represents the return the firm MUST get. For example this rate could be used as the discount rate of evaluating an investment, and maintaining the price of firm’s stock. 1.2 Analysis of Johanna Cohen’s calculation We analyzed the process of Johanna Cohen’s calculation, and found some flaws we believe caused†¦show more content†¦3.2 Calculating the costs of equity by DDM, and its advantages amp; disadvantages i. Calculation (based on EXIHIBIT 4):: Based on the dividend discount model, P0 = D0 * (1+g) / (k – g), then we get the return rate (the cost of equity) k = D0 * (1+g) / P0 + g = 0.48 * (1 + 0.055) / 42.09 + 0.055 = 6.7% ii. Advantages First, DDM fully considers the time value of consistent cash flow of an investment. Second, it is pretty easy to get the necessary historical data. Third DDM is flexible enough for the adjustment of any future situation. Fourth, once the growth pattern is confirmed, it is very straightforward to get the discount rate of assessing an investment. iii. Disadvantages First, without enough consideration of risk cost, DDM may underestimate the equity cost. Second, all of the data is based on historical record, so the result is not reliable considering of the future situations. Third, with the predetermined growth rate, it is obviously practical for the stock investors to estimate the possible profit, but may mislead the stock issuing firm from a better budgeting decisio n to a comparatively unsubstantial investment. 3.3 Calculating the costs of equity by the earnings capitalization ratio, and its advantages amp; disadvantages i. Calculation (based on EXIHIBIT 1amp;4) According to the earnings capitalization model, we have cost of equity = E1 / P0 = 2.16 / 42.09 = 5.13% ii. AdvantagesShow MoreRelatedNike Wacc Case Study2281 Words   |  10 PagesWhat is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? 2. If you do not agree with Cohen’s analysis, calculate your own WACC for Nike and justify your assumptions. 3. Calculate the costs of equity using CAPM, the dividend discount model, and the earnings capitalization ratio. What are the advantages and disadvantages of each method? 4. What should Kimi Ford recommend regarding an investment in Nike? 2 CaseRead MoreCase Study on Nike1252 Words   |  6 PagesCase Study Nike Introduction Good morning ladies and gentlemen and thank for taking the time to meet with us. Nike was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight. The company officially became Nike, Inc. on May 30, 1978. Nike has various products which include footwear as well as other apparel that compliment the former. This accounts for 92 percent of the company’s revenue. The other 8 percent comes from equipment and non Nike brand products, such as ColeRead MoreNike: Globalizing the Sportswear Industry1250 Words   |  5 PagesNike case Grachya Ovsepyan Alexander Kopenkin 2011 Nike – Globalizing the Sportswear Industry 1. Evaluate Nike’s business strategy. Does Nike have a sustainable competitive advantage? According to the text, there are four cornerstones in Nike’s strategy: 1) Deepening its relationship with customers. There are some obvious ways of having a â€Å"deep relationship† with customers such as taking into consideration results of various enquiries or following current trends like many companiesRead MoreNike1200 Words   |  5 PagesANALYSIS: NIKE INC. – COST OF CAPITAL | FOR PROF. EDWARD WONG | | ARUN KUMAR DURAIRAJ – 27416008 NIDISH PC – 27254423 VIPUL PARTI – 27246307 | 12/3/2015 | | Evaluation of Cohen’s Report and Calculation of WACC WeRead MoreA Portfolio Managers Analysis of Nike Inc. Essay1029 Words   |  5 Pagesdifficult decision to make while looking at Nike Inc. financials: whether Kimi should buy Nike shares or not for the fund Group she was working for. Kimi needed to consider all aspects of Nike Inc. financial position. On July 28,2011 Nike Inc. held a analyst’s meeting to disclose their fiscal year 2001 as well as to revitalize the company who wasn’t performing well. Thus, the meeting showed that Nike Inc. experienced some difficulties during the past years. First, Nike Inc. revenues have reached a plateauRead MoreNike Inc. - Cost of Capital1368 Words   |  6 PagesWhat is he WACC and why is it so important to estimate a firms cost of capital? The WACC (weighted average cost of capital) is a percentage figure resulting from a calculation method by which the adequate cost of capital of a firm is expressed. It considers the composition of a company’s funding, be it debt or equity. A corporation whose source of funding is equity by 100 percent will have a WACC equal to the cost of equity. By contrast, a levered company will have to reflect the cost of debt asRead MoreNike1217 Words   |  5 Pages13/3/2013 Nike, Inc. Cost of Capital 1 Discussion Questions †¢ What is the WACC and why is it important to estimate a firm’s cost of capital? What does it represent? Is the WACC set by investors or by managers? †¢ Do you agree with Joanna Cohen’s WACC calculation? Why or why not? If you do not agree with Cohen’s analysis, calculate your own WACC for Nike and be prepared to justify your assumptions. What mistakes did Joanna Cohen make in her analysis? Which method is best for calculatingRead MoreNike Case1172 Words   |  5 PagesNike Inc. Case 1. What is the WACC and why is it important to estimate a firm’s cost of capital? WACC is weighted average cost of capital, which is the expected rate of return on average from all the company’s existing debts and securities. It takes into account all different types of financing in the company’s capital structure. The reason it is important to estimate WACC is because it measures what it costs the firm to take on a project based on its current Debt and Equity mix. When theRead MoreNike Case Study1542 Words   |  7 Pagesin the stocks of Nike for the fund that she manages. †¢ Ford should base her decision on data on the company which were disclosed in the 2001 fiscal reports. While Nike management addressed several issues that are causing the decrease in market sales and prices of stocks, management presented its plans to improve and perform better. †¢ Third party sources also gave their opinions on whether the stock was a sound investment. WACC CALCULATION: Cost of Capital Calculations: Nike Inc Cohen calculatedRead MoreNike Inc Cost of Capital Case Study917 Words   |  4 PagesNike Inc. Case Number 2 Nike Incorporated’s cost of capital is a vital element when addressing opportunities regarding top-line growth and operating performance. Weighted Average Costs of Capital (WACC) is an essential estimation that is needed in order to determine the amount of interest that will be paid for each additional dollar financed. This translates to be the minimum overall required rate of return that the firm will keep. We disagree with Johanna Cohen’s assessment of Nike due to two

Critical Factors On Human Dignity And Capital Punishment

Antiepa Munatsi S00150701 This discussion is going to investigate and evaluate the critical factors in relation to human dignity and capital punishment utilising the case study of Andrew and Myuran. A discussion would be made on the issues surrounding the unfair forms of punishments that are used to deal with those who committed unimaginable crimes in the eyes of society. I believe this is an issue where human dignity is a critical factor because there is no respect for individual autonomy and Andrew and Myuran were not given the chance and hence their humanity and dignity violated. Perspectives 1 and 2 would be outlined and an analysis would be made to each in relationship to the case study. Also, understanding of human dignity in each†¦show more content†¦Question 1 Dwight Conquergood wrote about how the legal system in America tried to normalise capital punishment to make it seem less cruel by introducing other ways of execution. This was done by using the lethal injection as in McVeigh?s case (Conquergood, 2002). He advocates against the use of capital punishment and in his discussion highlighted that he attended many demonstrations with those against capital punishment. In addition, he highlights that there is bias from authorities when handling death cases. In one of the cases, the police lost documents which would have been given to the defense lawyers to fight against the sentence. However, the individual was put to death and he considered that death penalty to be unfair and unjust and that there has been instances of innocent people being on death row. He highlighted that minorities make up the largest number of prisoners on the death penalty despite representing a small percentage of the small population and argued that there was bias ag ainst certain minorities. The author indicated that African-Americans are 19% more likely to be put on death row as compared to other races even though they might have committed the same crime (Conquergood, 2002). His view can be put into quadrant 1A which refers to dignity obtained by being a human being (Kirchhoffer, 2013). However, when one is on death row, this dignity is taking away and therefore he argues that offenders

Mixed Handedness In Schizophrenia Health And Social Care Essay Free Essays

In the present survey I conducted a meta-analytical reappraisal of the literature of an association between laterality and schizophrenic disorder in an effort to ; ( 1 ) clear up the strength of the grounds for the prevalence of assorted laterality in schizophrenic disorder, ( 2 ) measure the effects of two of the chief manus penchant appraisals in the prevalence of mixed-handedness in schizophrenic disorder patients. The premise is that the methodological difference between specifying laterality within a class ( such as the Edinburgh Inventory ) or by grades ( as does the Annett Hand Preference Questionnaire ) will impact on the prevalence of assorted laterality observed. Background Schizophrenia is a disease characterized by profound break in knowledge and emotion, impacting the most cardinal human properties: linguistic communication, thought, perceptual experience, affect, and sense of ego ( American Psychiatric Association [ DSM-IV-TR ] , 2000 ) . We will write a custom essay sample on Mixed Handedness In Schizophrenia Health And Social Care Essay or any similar topic only for you Order Now Even though the neuropathology of schizophrenic disorder remains vague, there have been several hypotheses proposed for the aetiology of the disease, one of which is unnatural intellectual anatomical lateralization ensuing from pre-natal neurological abuse ( Cannon et al. , 1995 ) . In fact, a break in the dissymmetry of the human encephalon is considered a cardinal characteristic in many psychiatric conditions ( Francks et al. , 2007 ) . One feature which is considered to associate to differences in encephalon construction is lateralised behavior, for illustration manus penchant ( White, Lucas, Richards A ; Purves, 1994 ) . In schizophrenic disorder, the unnatural development of intellectual lateralization is considered to ensue in a displacement off from manual laterality ( Cannon et al, 1995 ) . Indeed, one of the chief markers of schizophrenic disorder is the prevalence of untypical laterality in schizophrenics compared with the healthy population. In add-on to this, it has bee n suggested that the way of sidelong dissymmetry in schizophrenic disorder has been associated with the chronicity of the upset, Cannon et Al ( 1995 ) reported a strong association between chronicity and assorted laterality in schizophrenic disorder. Although there have been several surveies purporting to demo the association of laterality in schizophrenic disorder, consequences have been conflicting sing the strength and way of untypical laterality in schizophrenic disorder with some surveies describing an addition in left-handednesss ( Gur, 1977 ; Manoach et al. , 1988 ) and others describing an addition in mixed-handedness ( Cannon et al, 1995, Dane et Al, 2009 ) . This raises the inquiry of whether a differentiation between assorted laterality can be made at all. Method Study choice Included were surveies that reported a tripartite categorization of manus penchants ( right, left and assorted laterality ) for both grownup ( aged 18 or over ) schizophrenic disorder patients and healthy controls. Surveies were included which had assessed manus penchants utilizing the Edinburgh Handedness Inventory ( EHI ; Oldfield, 1971 ) or the Annett Hand Preference Questionnaire ( AHPQ ; Annett, 1970 ) . Datas from non-clinical samples were excluded. Schizophrenia diagnosings should be made utilizing Research Diagnostic Criteria, DSM-III, DSM-IIIR and DSM-IV. All other surveies utilizing different diagnostic standards were excluded. In add-on, merely surveies utilizing grownup ( aged 18 or over ) as schizophrenic disorder typically presents itself in early grownup life, and may show itself really otherwise in childhood. The result step was the frequence of a given manus penchant ( right, assorted or left ) grouped by population group ( schizophrenia patients, healthy controls ) . Search Procedure Searchs were performed in two databases: Web of Knowledge and Psychinfo. These databases were searched up to September 2010. The hunt footings used were ; ‘schizophrenia ‘ , ‘handedness ‘ , ‘lateralisation ‘ . Surveies were besides attained by analyzing the mention lists of two reappraisal articles ( Somers, Sommer, Boks, A ; Kahn, 2009 ; Dragovic A ; Hammond, 2005 ) . Lone diaries in English were searched. Abstractions of surveies were so examined by one writer with mention to the exclusion and inclusion standards. The programmer was familiar with the literature being reviewed. Data extraction For each survey the following informations were extracted: Writer ( s ) and twelvemonth of publication ; methods: participants and control sample used, where they were recruited from, the diagnostic standards used, the laterality appraisal used, age of oncoming and chronicity of the patients ; whether the consequences from the surveies were important and extra notes. Data Analysiss Calculations were based on the frequence informations described in the primary studies. To gauge the prevalence of assorted laterality within schizophrenia patients we calculated single odds ratios for each survey to analyze consequence sizes. Overall odds ratios were calculated by uniting the single surveies ‘ frequence informations within each subtype ( right, assorted and left laterality ) and subgroup ( schizophrenia patients and wellness controls ) . The cogency of ciphering an overall odds ratio is questionable as the consequence can frequently be misdirecting, however it was chosen because it provides an approximative computation of overall consequence sizes for assorted laterality. An estimation of the significance degree for each survey was used by ciphering the z-scores for each odds ratio in order to happen the alpha value. Consequences Features of included surveies Ninety-five diary articles were identified by the hunt scheme, of which 5 surveies conducted between 1995 and 2008 met all standards for inclusion. Three of the surveies used in the analyses used the EHI ( Cannon et al. , 1995 ; Dane et al. , 2009 ; Reilly et al. , 2001 ) , and two surveies used the AHPQ ( DeLisi et al. , 2002 ; Malesu et al. , 1996 ) for laterality appraisals. In relation to the different laterality appraisal methods used, the surveies differed markedly in the standards they used to specify the three different categorizations of laterality ( right, assorted and left ) . Within the model of the EHI, two surveies defined right-handedness as ‘+100 ‘ , left- as ‘-100 ‘ and mixed- , every bit assorted as everything between these two extremes ( Cannon et al, 1995 and Reilly et al. , 2001 ) while the other defined mixed-handedness as values between -75 and +75. Within the model of the AHPQ, one survey used a wide definition of assorted laterality as between 2 and 7 ( Malesu et al, 1996 ) while the other used a somewhat narrower definition for assorted laterality as between 3 and 6 ) . Oddss ratios for assorted laterality Table 1 displays the single odds ratios ( OR ) for assorted laterality compared with the lateralised group ( right and left handers combined ) in schizophrenic disorder patients compared with controls. The single odds ratios ranged from 1.21 to 4.59. The overall odds ratio was based on 5 surveies with a sum of 749 schizophrenic disorder patients and 572 control topics and indicates that schizophrenic disorder patients were about 1.5 times more likely to be mixed-handed than healthy controls ( OR = 1.64 ; 95 % CI = 1.22-2.20 ) . As shown in Table 1, three of the five surveies ( Cannon et al, 1995 ; Dane et Al, 2009, and DeLisi et al. , 2002 ) found stronger odds ratios for the prevalence of assorted laterality in schizophrenic disorder patients compared with controls. Need to add estimation of significance degree for each survey Table 1 Odds ratios for prevalence of assorted laterality in schizophrenic disorder patients compared with controls. A A A A A A A A A A A A Schizophrenia Patients A Controls A A A Survey N Assorted Lateralised A N Assorted Lateralised A Oddss Ratios 1995 Cannon et Al. 93 35 58 A 43 5 38 A 4.59 2009 Dane et Al. 88 33 55 A 118 23 95 A 2.48 2002 DeLisi et Al. 418 43 375 A 288 25 263 A 1.21 2001 Reilly 30 11 19 A 37 6 31 A 2.99 1996 Malesu et Al. 120 36 84 A 86 21 65 A 1.33 A Entire 749 158 591 A 572 80 492 A 1.64 Oddss ratio for EHI and Annett laterality appraisals To look into the hypothesis that the stronger prevalence of assorted laterality in schizophrenic disorder patients is attributed to the type of laterality appraisal used we calculated an overall odds ratio for the prevalence of mixed-handedness in surveies utilizing the Edinburgh Handedness Inventory compared with the Annett questionnaire ( see Table 2 ) . As shown in Table 2, patients assessed for laterality utilizing the EHI were about 3.5 times more likely to be categorised as assorted handed every bit opposed to lateralised. We converted this odds ratio into a pearson correlativity coefficient and found a reasonably positive correlativity between the type of appraisal used and the prevalence of assorted laterality in schizophrenic disorder patients ( r =0.4573 ) Table 2 Overall odds ratio for prevalence of assorted laterality in schizophrenic disorder patients when assessed with the EHI compared with the APHQ. A A A A Mixed vs. lateralised OR 95 % CI Handedness Assessment EHI ( N ) 79 vs. 132 Annett ( N ) 79 vs. 460 3.4848 2.4142 – 5.0301 A A A A Discussion One of the chief findings in the present meta-analyses on laterality from five selected surveies is that schizophrenic disorder patients are significantly more likely to be mixed-handed than normal controls, a determination which is paradoxically compatible with one major reappraisal of the literature ( Somers et al. , 2009 ) and incompatible with an averment from another major reappraisal ( Dragovic A ; Hammond, 2005 ) . We found grounds of a positive moderate correlativity between the types of manus penchant appraisal used ( EHI or AHPQ ) and the prevalence of assorted laterality reported in schizophrenic disorder patients. One possible account for this association is the differences in the scope of parametric quantities used to specify assorted laterality within the EHI and AHPQ. Furthermore, the EHI and AHPQ use two different methods to measure laterality ; one uses discrete ( EHI ) values and the other ( AHPQ ) uses uninterrupted appraisals. For illustration within the EHI, dif ferent scopes were used to sort assorted laterality ; some surveies used between -75 and +75 to exemplify assorted laterality whilst others have used a broader step to measure assorted laterality ( between the two extremes of -100 and +100 ) . Studies which used the EHI to analyze the rate of mixed-handedness in schizophrenic disorder patients were about 3.5 times more likely to sort patients as assorted handed. This in portion is due to the wider definitions of assorted laterality used with the model of the EHI questionnaire, what remains unchallenged is the rates of non-right laterality. The inquiries raised by this is whether it is right to specify an intermediate parametric quantity for assorted laterality given that manual laterality can merely be a displacement towards Thursday. If we are to find a leftward displacement towards sole left laterality or an intermediate categorization of assorted laterality so the manner we assess this should be planetary for all surveies. At pre sent, the surveies are n’t truly comparable within themselves because of this mutual exclusiveness between which definitions of assorted laterality have been used and which appraisal questionnaire is to be used. Restrictions A major restriction to this survey was the modest sum of surveies used. This issue may be related to the pick of choice standards we devised. We chose to measure surveies which reported laterality in three-ways ( right, assorted and left handed ) . Although this enabled usage to describe the single per centums of the different types of laterality for each survey, it narrowed the surveies we were able to include. Besides it is of import to turn to the issue of our utilizing merely published surveies for this meta-analysis which may belie the true nature of any association between schizophrenic disorder and laterality as negative findings tend to be under-reported. Decision How to cite Mixed Handedness In Schizophrenia Health And Social Care Essay, Essay examples