Case Name :      Nike, Inc.: Cost of Capital (v. 1.8)

Authors :           Robert F. Bruner, Jessica Chan

Source :             Darden School of Business

Case ID :           UV0010

Discipline :        Finance

Case Length :    08 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Introduces the weighted average cost of capital (WACC). Provides a WACC calculation, although it has been intentionally designed to mislead students. Thus, their task is to identify and explain the “mistakes” in the analysis, which are intended to highlight conceptual issues regarding WACC and its components. Such issues are often misunderstood by students. Assumes that students have been exposed to the WACC, CAPM, the dividend discount model, and the earnings capitalization model.