Business, 24.10.2019 17:43, krazyykay

Ocalculate nike's weighted average cost of capital, we will need to calculate the proportions of debt and equity. you can use joanna cohen's memo (exhibit 5 in the case) as a model. skip the first section on single or multiple costs of capital. we'll accept her position that one cost of capital for the whole company is satisfactory. next she determines the relative proportions of debt and equity to use in the wacc calculation. the debt items on the balance sheet include the current portion of long-term debt, notes payable and long-term debt. see case exhibit 3. equity is either the total shareholders' equity number from the balance sheet (the 'book value') or the total market value of the stock outstanding. shares outstanding and the current price of nike common stock can be found on case exhibit 2. compare her ideas with information in the technical note, the cost of capital: principles and practice. are they in alignment? either justify her reasoning, or support your own direction, note your reasoning and any assumptions you have made, and determine the weights of debt and equity that you will use. this is similar to what we did in discussion question 2. what are the weights (proportions) of debt and equity for nike? the weights are in percentage form and must add up to 100%.

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Ocalculate nike's weighted average cost of capital, we will need to calculate the proportions of deb...