Coca Cola Amatil Limited : Executive Summary

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Corporate Finance Assignment
Coca-Cola Amatil Limited

Executive Summary
COCA-COLA AMATIL LIMITED is one of the largest non-alcoholic and ready-to-drink beverage manufacturers in the Asia-Pacific region. On the Australian Stock Exchange (ASX), Coca-Cola Amatil Ltd is characterised as “consumer staples” under “food beverage & tobacco” and was given the issuer code (CCL) after it was officially listed and traded on the ASX for the first time in 1969.

The objectives of this report is to provide an evaluation on the risk and return of Coca-Cola Amatil Ltd, using methods to calculate its share price and other financial figures. Firstly, the report will analyse and evaluate the stock’s beta (β), which according to Investopedia, “A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole”. The data used to evaluate beta is based on past trends and data from a Coca-Cola Amatil annual report. The report will also use the capital asset pricing model (CAPM) to discount a rate of the stock whilst forecasting potential dividend growth rates in the future. The analysis will also include the use of the dividend discount model and method of comparable for overall company valuation. Finally, the report will provide a recommendation whether an investor should hold, buy or sell Coca-Cola Amatil stock.

Calculation and Comparison of Beta (β)
Beta (β) is an important indicator for measuring a stock’s volatility. According to a NSW

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