| FIN-516 Week 2 - MINI – CASE ASSIGNMENT | Deere & Company (NYSE:DE) | |
A fundamental Analysis into the financial performance of Deer and Company (NYSE :DE ), better known as JOHN DEERE & CO. |
FIN-516 – WEEK 2 – MINI – CASE ASSIGNMENT
Deere & Company (NYSE:DE)
1. What is the name of the company? What is the industry sector?
Deere & Company also more commonly known as John Deere, along with its subsidiaries, operates in three segments: agriculture and turf segment, construction and forestry segment and financial services segment. The John Deere agriculture and turf segment manufactures and distributes a full line of agricultural and turf equipment and related service parts. John Deere…show more content… No, there is no Preferred stock issued by John Deere 5. What is the capital structure of the company?: Short term portion of Long Term Debt, Long Term Debt, Preferred Stock (if any), and market value of Common Stock issued and outstanding?
John Deere has very Debt heavy Capital Structure and funds almost 80% of its capital through borrowings and credit. In terms of long-term solvency, the total debt-to-equity percentage is 510%, which mirrors John Deere’s debt-heavy capital structure.
Short-term debt $ 6,852.3
Long term debt $ 16,959.9
Preferred stock $0
Market value of Common stock 3,251.7 6. What is the company’s current actual Beta?
Company’s current actual beta =1.53
7. What is the company’s current Marginal Tax Rate?
The Marginal tax rate paid by the company in 2011 = 34 %
From the Consolidated Income statement it is evident that John Deere had a Provision of Tax of $1423.6 (million) and this from a consolidated group income of $4222.8 (million).
8. What is the Cost of Debt, before and after taxes?
The cost of debt is the effective rate that a company pays on its total debt.
This measure is useful, because it gives investors an idea as to the riskiness of the company compared to others. The higher the cost of debt the higher the risk.
Cost of debt (before tax) = Corporate Bond rate of company's bond rating. * S&P rated Deere and Company bonds "A " * Current 20 year corporate bond