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At the end of the most recent fiscal year, Nike had shareholder's equity of $12B and Visa had shareholder's equity of $30B. During the current fiscal year, analysts' expect Nike to have net income of $3.24B and Visa to have net income of $6.58B. Assuming shareholders in Nike and Visa have a 10% cost of equity. Based on the two companies' expected residual income, are the two companies creating value for their investors?

Financial Management, Finance

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