Under Armour, Inc is a United State of American firm that produces various footwear and casual apparel internationally with its head office in Maryland (Diogo, 2017). Other Company offices owned by the business are located in places such as Amsterdam, London, Mexico City as well as New York City where the firm has the largest shares in the footwear industry. Under Armour, Inc was formed by Kevin plank in 1996 who acted as the official owner of the company as well as the CEO at the age of 23 years (Vajen, 2016). Kevin, begun the business in Washington in one of the basements belonging to his grandmother after which he moved towards the coast with an apparel place on his car trunk. As the Under Armour, Inc. continued to operate in the industry, …show more content…
was named the outfitter of the newly introduced XFL football league in the United States of America. After being designated as the outfitter of the league, the popularity of the Under Armour, Inc. increased significantly in the United States after which the company started to expand its operation within the United States and other countries in the world. Through, launching a commercial television, the firm managed to raise capital worth 150$ million that it used to open its initial full line and full price retail outlet in the Maryland regions, United States (Diogo, 2017). By operating successfully from the time of business creation, the company has managed to provide financial support/sponsor various projects like the REALITY TV SHOW. The suits put on by the speed skaters upon reversing the previous suit model. The principal products manufactured by the Under Armour, Inc. include jackets, egging, shorts as well as protective gears and athletic shoes. The emerging apparel industry where the firm operates was initially by the expansion of the Under Armour, Inc. product lines, for example, the all season gear and the Turf gear. The recently released products by the Under Armour, Inc. consist of the Cold gear product line that disseminate heat making use of powder and heat recirculation. Most of the organization clients are male (53%) and the majority are working class graduated from …show more content…
Corporate Tax Rate from the yahoo financial data is provided as = 25.78%. Firm's Tax Rate is obtained by dividing Provision for income tax by the Income before income tax Under Armour Inc. Weight for Equity: Equity Weight of the company is given by dividing the market value of the firm equity by the total value of the firm (Vicente, 2016). W (E) = Market value of the company's equity/(market values of equity plus debt market value) = 50.86M/3.3% 5.9% WACC (Weighted Average Cost of Capital) for the Under Armour Inc WACC is obtained by applying the formula: WACC = [(wE) x RE] + [(wPF) x RPF] + [(wD) x RD x (1- TC)] From the formula provided the Weights are represented as follows: (wE) = shows the % of common equity in capital structure (wPF) = % of preferred stock in capital structure (wD) = % of debt in capital structure Component costs RE = firm’s cost of equity RPF = firm’s cost of preferred stock RD = firm’s cost of debt TC = firm’s corporate tax rate The WACC for the company can as well be calculated by applying the formula WACC = ((E/V) * Re) + [((D/V) * Rd)*(1-T)] where, E represents the Market value of the company equity D represents the Market value of the company's