Both Nike and Adidas operate in the business of producing and selling sports goods, and they are considered to be rivals in this industry. Below is information about both firms Adidas Current stock price $100 per share Number of shares outstanding 30 million Current level $60 earnings million Nike Number of shares 20 outstanding million Current level of $10 earnings million You are interested in purchasing a stock of Nike. If you use a multiple valuation approach, what should be the appropriate stock price of Nike? Note: Please express the answer as a whole number. "$" is NOT required.
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- P/E ratio for Adidas = Current stock price / Earnings = $100 / $60 million = 1.67 - P/E ratio for Nike = Current stock price / Earnings = X / $10 million Show more…
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