WILMINGTON UNIVERSITY 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