MAN1934 - F I N5210 M anagerial F inance Case Study...

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FIN5210 Managerial Finance Case Study Suggested Questions Nike, Inc.: Cost of Capital 1. 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? 2. If you do not agree with Cohen’s analysis, calculate your own WACC for Nike and be prepared to 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? JetBlue Airways IPO Valuation 1. What are the advantages and disadvantages of going public? 2. What different approaches can be used to value JetBlue’s shares? 3. At what price would you recommend that JetBlue offer its shares? KRISPY KREME DOUGHNUTS, INC. 1. What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and current condition of Krispy Kreme Doughnuts, Inc.? 2. How can financial ratios extend your understanding of financial statements? What questions do the time series of ratios in case Exhibit 7 raise? What questions do the ratios on peer firms in case Exhibits 8 and 9 raise?
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