NTRODUCTION: Kimi, a portfolio manager working for a large-cap fund firm called NorthPoint Group, had to make a difficult decision while examining the Nike Inc. financials: whether or not Kimi should have bought Nike shares for the fund group he worked for. Kimi had to consider all aspects of Nike Inc.'s financial position. On July 28, 2011, Nike Inc. held an analyst meeting to disclose its 2001 fiscal year and to revitalize the underperforming company. Therefore, it emerged from the meeting that Nike Inc. has encountered some difficulties in recent years. First, Nike Inc.'s revenues have reached a plateau of $9 billion since 1997, and its net income has fallen from $800 million to $520 million. Furthermore, it showed that Nike Inc.'s market share for U.S. sneakers had declined from 48% in 1997 to 42% in 2000, their supply chain systems were not efficient enough, and a strong dollar reduced the company profitability/revenue. During Nike Inc.'s meeting, it was decided that the company could increase revenues by producing more sneakers for the mid-price segment, as well as developing the apparel segment and gaining greater control over expenses. Analysts expected a long-term revenue growth target of 8-10% and an earnings growth target above 15%. Kimi reviewed all the reports from the July 28 meeting but could not find a clear recommendation to make a clear decision. Therefore, he decided to rely on discounted cash flow forecasts to present a clear decision to his fund. He also conducted a sensitivity analysis that showed Nike Inc. was undervalued at discount rates below 11.17%. Kimi was short on time as he had an important meeting to hold and needed to calculate Nike Inc. ... middle of paper......$37). Recommendation In conclusion, because Nike Inc. is overvalued, we advise Kimi not to buy market share for his large-cap fund company, NorthPoint. The stock price must be at or near its value for Kimi to gain market share of Nike Inc. and add the company to the NorthPoint portfolio. The stock market is very volatile, so Kimi should wait and see if the stock price is neither undervalued nor overvalued. Furthermore, Nike Inc. is a very promising company for the next few years as during the meeting, the management said that it will increase revenues, invest in sports shoe items for the mid-price segment and push its clothing line. All of these measures could boost the stock market price for the future, making it more attractive for Kimi's large-cap enjoyment and leading to the stock price being valued at its fair price..