1. How did Cohen estimate the cost of debt capital?
2. What is the current yield the market demands on Nike debt?
3. What is the appropriate cost of debt capital to use in the Weighted-Average Cost of Capital, noting that the WACC will be used to discount future cash flows?
4. Estimate the cost of equity capital using the CAPM.
5. Infer the cost of equity capital being applied by the market under the assumption that the market values Nike stock as a perpetually growing stream of dividends (P=Dividend 1/(r-g)).
6. What is your preferred estimate of the cost of equity capital, and why?
7. What is your estimate of the WACC for Nike?
8. If your estimate differs from Cohen's estimate, explain why you disagree with her.
9. Estimate the justified share price for Nike.