Starbucks Corporation WACC – 7.5% What are some of the risks Starbucks and other similar comanies in the food and beverage retail industry face in the current economic and political environment. How could these risk impact WACC?
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Starbucks Corporation
WACC – 7.5%
What are some of the risks Starbucks and other similar comanies in the food and beverage retail industry face in the current economic and political environment. How could these risk impact WACC?
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- Parmalat is one of the leading firms in in the long-life milks, yogurt, and juices market. The company became the world's seventh-largest supplier of diary products. In 2002, the company reported 7.6 billion euros in annual sales. Parmalat's failure is expected to have a stimulative effect on corporate governance reform. Parmalat Finanziaria S.P.A misrepresented its financial statements by billions of dollars. The company's founder and former CEO, Tanzi, now stands accused of market rigging, false auditing, and misleading investors. Tanzi established a series of overseas companies to transfer money among and to conceal liabilities. Parmalat defaulted on a 150 million euros (U.S. $184 million) payment to bondholders. Calisto Tanzi admitted to having falsified Parmalat's accounts for over a decade and to having stolen at least $600 million from the publicly traded company. The fraud was perpetrated by, among others, CFO Fausto Tonna, who produced fake documents to falsify the existence…Q5 The EBIT of the unlevered company is OMR 60,000; cost of equity of unlevered company is 8% and the corporate tax rate is 30%, then what is the value of unlevered company (Vu) under Modigliani-Miller Model? a. OMR 375,000 b. OMR 525,000 c. OMR 275,000 d. OMR 425,000Q4: You have been asked to assess whether Walgreen, a drugstore chain, is correctly priced relative to its competitors in the drugstore industry. The following are the price/sales ratios, profit margins, and other relative details of the firms in the drugstore industry. Company P/S Ratio Profit Margin (%) Payout (%) Expected Growth (%) Beta Arbor Drugs 0.42 3.40 18 14.0 1.05 Big B 0.30 1.90 14 23.5 0.70 Drug Emporium 0.10 0.60 0 27.5 0.90 Fay’s 0.15 1.30 37 11.5 0.90 Genovese 0.18 1.70 26 10.5 0.80 Longs Drug 0.30 2.00 46 6.0 0.90 Perry Drugs 0.12 1.30 0 12.5 1.10 Rite-Aid 0.33 3.20 37 10.5 0.90 Walgreen 0.60 2.70 31 13.5 1.15 Based entirely on a subjective analysis, do you think that Walgreen is overpriced because its price/sales ratio is the highest in the industry? If it is not, how would you rationalize its value?
- Q45 If the value of unlevered company (Vu) is OMR 180,000 and unlevered cost of equity (Ke) is 10%, then what is the EBIT of unlevered company under Modigliani-Miller Model? Assume that the corporate tax rate is 30%. a. OMR 25,714 b. OMR 12,600 c. OMR 36,000 d. OMR 18,000E8.22 (FIFO and LIFO Effects) You are the vice president of finance of Mickiewicz Corporation, a retail company that prepared two different schedules of gross margin for the first quarter ended March 31, 2019. These schedules appear below. (on picture) The computation of cost of goods sold in each schedule is based on the following data. (on picture) Peggy Fleming, the president of the company, cannot understand how two different gross margins can be computed from the same set of data. As the vice president of finance, you have explained to Ms. Fleming that the two schedules are based on different assumptions concerning the flow of inventory costs, i.e., FIFO and LIFO. Schedules 1 and 2 were not necessarily prepared in this sequence of cost flow assumptions. Instructions : Prepare two separate schedules computing cost of goods sold and supporting schedules showing the composition of the ending inventory under both cost flow assumptions (assume periodic system).Yola Corporation is required to include 15 items in their 10-K for the year ending 9/30/21. Which required item from the 10-K would this content be located? Risks Specific to our Company We generate a significant portion of our revenues from advertising, and reduced spending by advertisers, a loss of partners, or new and existing technologies that block ads online and/or affect our ability to customize ads could harm our business. Question 26 options: a) Selected Financial Data b) Certain Relationships and Related Transactions and Director Independence c) Legal Proceedings d) Business
- Pnb is a major company in the market for long-life milks, yoghurts, and juices. The firm rose to become the seventh-largest provider of dairy goods in the world. The corporation had yearly revenues of 7.6 billion euros in 2002. The failure of Parmalat is likely to have a positive impact on corporate governance reform. Parmalat Finanziaria S.P.A. omitted billions of dollars from its financial accounts. The company's founder and former CEO, Tanzi, now stands accused of market rigging, false auditing, and misleading investors. Tanzi established a series of overseas companies to transfer money among and to conceal liabilities. Parmalat defaulted on a 150 million euros (U.S. $184 million) payment to bondholders. Calisto Tanzi admitted to having falsified Parmalat's accounts for over a decade and to having stolen at least $600 million from the publicly traded company. The fraud was perpetrated by, among others,…Lannister Manufacturing has a target debt-equity ratio of 0.62. Its cost of equity is 18 percent, and its cost of debt is 11 percent. If the tax rate is 33 percent, what is the company's WACC? ANSWER: 13.93% don't know the steps.Tech Star Ltd is evaluating its CEO's performance last year.The net income earned is 1.2 million.The company invested in three projects worth 4 million,2 million and 8 million respectively.The risk free rate is 1%.Market beta is estimated at 1.2 and the market risk premiumis 5%.The company has no debt financing.What is the CEO's economic value added(EVA)? A.0.220 million B.0.388 million C.None of the choices D.The CEO has 0 economic value added
- READ THEN ANSWER THE QUESTION : THE QUESTION : On Wednesday April 8, Starbucks announced that itexpects its fiscal second-quarter earnings to be cutnearly in half as the coronavirus pandemic causessales to plunge in its two largest markets. What wouldbe the right pricing strategy to maximize revenues forStarbucks in the current circumstances? In January 2020, Starbucks raised their beverage prices by an average of1% across the U.S, a move that represented the company’s firstsignificant price increase in 18 months. I failed to notice because the pricechange didn’t affect grande or venti (medium and large) brewed coffeesand I don’t mess with smaller sizes, but anyone who purchases tall size(small) brews saw as much as a 10 cent increase. The company’s thirdquarter revenue rose 25% to $417.8 million from $333.1 million a yearearlier, and green coffee prices have plummeted, so what gives?Starbucks claims the price increase is due to rising labor and non-coffeecommodity costs, but with the…Text:[Blair] Blair Waldorf design has 40% market share and a 40% share of voice in the clothing industry. Research showed that the industry's total marketing effort is $6 million, and Waldorf's gross margin is $6,842,000. What is the short-term gain or loss for Waldorf design if it successfully increases its market share by 2 points by investing in the recommended additional share of voice? O. $742,100 gain O. $60,000 loss O. $222,100 gain O. $171,050 gain O. $162,210 gainchoose the letter of the correct answer Fara Corporation has accounts receivable of P400,000. Its manufacturing cost approximates 35 percent of selling price. The before-tax profit margin is 16 percent, and the inventory carrying cost is 4 percent of the selling price. Sales commissions are 7 percent of sales. What is Fara's average investment in accounts receivable? a. P64,000.00b. P84,000.00c. P164,000.00d. P184,000.00e. P284,000.00