Nike Project

WILMINGTONUNIVERSITY

COURSE TITLE: Advanced Financial Analysis

COURSE NUMBER: MBA 7294

FACULTY MEMBER: John Bish

STUDENT NAME:

Week #2 Case Study – Nike
Case Study Analysis Papers grading rubric

Grading Criteria
Maximum Points

Define WACC and discuss how WACC is
calculated.
a. How is it calculated?

b. How can organizations utilize WACC within

capital budgeting and investment decisions?

2.5 pts
2.5 pts

Discuss how to use WACC within a capital
budgeting decision or investment decision?

Does this approach maximize shareholder
value?

7.5 pts

7.5 pts

Develop the WACC for Nike Corporation

a. What risk-free rate and risk premium did you

use to calculate the cost of equity?

b. How did you measure Nike’s cost of debt?

c. Did you use arithmetic or geometric

averages to measure rates of return? Why?

15

15

10 pts

5 pts

Calculate the impact of an error in Nike
Corporation’s WACC;
if estimated WACC was 10%; and actual
WACC was 12% &
if estimated WACC was 10%; and actual
WACC was 8%?

Calculate the Value of Nike Shares

10

10

10

Proper spelling, punctuation, and APA
Formatting

5

Total

100