The market forecast of nike growth rate easy the shares of


Question: The Market Forecast of Nike Growth Rate (Easy) The shares of Nike, Inc., traded at $7 4 after its financial statements for fiscal year 20 I 0 were published. The balance sheet reported book value per share of$20.15. Analysts were forecasting EPS of$4.29 for 2011 and $4.78 for 2012. A dividend of$1.16 was indicated for 2011. Your required return is 9 percent.

a. What is the forecast of the residual earnings growth rate after 2012 that is implicit in the market price?

b. What is the market forecast of EPS for 2013 and 2014?

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