...FIN 6416 Case 1: Valuing Coca Cola stock Executive Summary The case that has been presented is a valuation of Coca Cola, its current stock price, and whether Coca Cola has the potential to be a good recommendation for clients to add to their portfolios. The analysis herein takes into account historical Coca Cola financial information, and uses the information to ascertain whether or not Coca Cola, at its current stock price of $58.00 a share, is a viable security for investors to add to their portfolios. Methodologies The completed analysis of Coca Cola’s investment potential required the use of a few calculations to gather enough information regarding the selling price of its stock. The first of these calculations used is the Capital Asset Pricing Model (Exhibit 1). This model was used to calculate the required rate of return for an investor in Coca Cola. In this calculation, Beta was set at 1.24, and the risk free rate was set at the 30-year government bond rate of 6.22%. The market risk premium was set at the stated 6.00% rate, resulting in a required rate of return of 13.66%. Once this required rate of return was calculated, the Dividend Discount Model (Exhibit 2) was used to calculate a forecasted 1997 stock price for Coca Cola. Using the required rate of return of 13.66%, a forecasted dividend of $0.62, and the expected constant dividend growth rate of 12% for this calculation, the model has forecasted a 1997 stock price of $37.35. For this analysis, a...
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...Indian Institute of Management Kozhikode Valuation of Brand “Coca-Cola” Project Report, Valuations and Real Options Submitted to: Professor Abhilash Nair GROUP 1, Term V 1. Harshit Boob (PGP/15/143) 2. Saurav Agarwal (PGP/15/319) 3. Siddhartha Roy (PGP/15/321) Valuation of Brand “Coca-Cola” 2012 Contents Executive Summary....................................................................................................................................... 3 COCA-COLA Company ................................................................................................................................... 4 Coca-Cola Brand ............................................................................................................................................ 6 Relevance of the Study ................................................................................................................................. 6 Why Coca-cola .............................................................................................................................................. 7 Objective of the Study .................................................................................................................................. 8 Literature Review .......................................................................................................................................... 8 Data Source .............................................................................
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...examination, and make stock suggestions. Analysts assemble and practice a variety of information about numerous stocks, from their intrinsic values comparative to their up to date market prices, from their valuation multiples and to conclude with the rate the investment prospective of every stock. In this research paper, I as an investment analyst will inspect Pepsi company’s analyst predilections across stocks, and estimate the sources of the investment worth presented by analyst stock recommendations and its changes for the particular company. II. What is Stock Valuation Stock valuation is a method of estimating the average intrinsic value of a stock by applying fixed formulas that cause in numerous financial indicators. Every firm has an intrinsic value also known as strike price of a company, and that strike price is based on the quantity of free cash flow they can give throughout their effectual era. A forecaster (analyst) valuing the corporation possibly will look at company’s administration, the composition of its capital structure, expectation of future earnings, and market importance of resources (assets). According to Nguyen (n.d.), “When trying to figure out which valuation method to use to value a stock for the first time, most investors will quickly discover the overwhelming number of valuation techniques available to them today”. Now a days, it is very easy for investors to understand the best stock valuation technique to find out the value of stocks because of devastating...
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...Valuing Coca-Cola Using The Free Cash Flow To Equity Valuation Model John C. Gardner, University of New Orleans, USA Carl B. McGowan, Jr., Norfolk State University, USA Susan E. Moeller, Eastern Michigan University, USA ABSTRACT In this paper, we provide a detailed example of applying the free cash flow to equity valuation model proposed in Damodaran (2006). Damodaran (2006) argues that the value of a stock is the discounted present value of the future free cash flow to equity discounted at the cost of equity. We combine the free cash flow to equity model with the super-normal growth model to determine the current value of Coca-Cola. At the time of this paper, we determined a value of Coca-Cola at $161 billion using the free cash flow to equity model, and the actual market value of Coca-Cola was $150 billion. Keywords: Coca-Cola; Free Cash Flow to Equity; Equity Valuation; Super-normal Growth Model CORPORATE FINANCIAL MANAGEMENT AND STOCK VALUATION C orporate financial management encompasses the efficient acquisition and allocation of funds. The objective of corporate financial management is to maximize the value of the firm. Solomon (1963, page 22, Chapter II) argues that wealth maximization should be the goal of corporate financial management because this criterion maximizes the wealth of the owners of corporations and maximizes the wealth of a society by maximizing economic output. The value of the firm is measured by the market capitalization of the firm. The...
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...Culture Challenges at Coca Cola Final Group Project of Organisation Planning and Design Akshit Jauhari 15PGPIM05 Devadatt Gholap 15PGPIM12 Ishaan Sharma 15PGPIM16 Piyush Arora 15PGPIM21 Sakshi Jain 15PGPIM43 Ujjwal Singh 15PGPIM44 TABLE OF CONTENTS 1) Introduction---------------------------------------------------------------------------------------------2 2) Mission & Vision---------------------------------------------------------------------------------------3 3) Culture at Coca Cola----------------------------------------------------------------------------------4 4) Culture Issue at Coca Cola---------------------------------------------------------------------------5 5) Cultural Change to power innovation------------------------------------------------------------6 6) Teaching Notes-----------------------------------------------------------------------------------------8 7) References----------------------------------------------------------------------------------------------14 INTRODUCTION The Coca-Cola Company, a beverage company is the manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups. It is best known for its flagship product Coca- Cola, invented by pharmacist John Stith Pemberton in 1886. Asa Candler who incorporated The Coca-Cola Company in 1892 bought its formula and brand in 1889. Besides its flagship Coca-Cola beverage, Coca-Cola currently offers more than 400 brands in over...
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...Coca-Cola Inc. Financial Analysis & Valuation Table of Content Executive Summary and Financial Inputs 2 5 Force Analysis 3 Strategies to Create and Sustain Competitive Advantage 3 Accounting Analysis 5 Ratio Analysis 5 Executive Summary In our analysis of Coca-Cola Inc., we estimate an Enterprise Value of $71.3B and an Equity Value of $60.9B, or a value per common share of $25.16. Given the current share price of $44.28, our recommendation for the stock is a “SELL”. Listed below are our key assumptions for the above valuation as well as the conclusions drawn from the analysis of financial statements that led to these assumptions. Key Estimates and Assumptions: * The estimates for financial inputs for the explicit period 2005 through 2009 are as follows: % | 2005 | 2006 | 2007 | 2008 | 2009 | Sales Growth | 5% | 5% | 5% | 5% | 5% | Cost Of Goods Sold % | 36% | 36% | 36% | 36% | 36% | Selling & Administrative Expenses % | 37% | 37% | 37% | 37% | 37% | NFA/Revenues | 89% | 89% | 89% | 89% | 89% | WCR/Revenues | 0% | 0% | 0% | 0% | 0% | * Percentages applied for the explicit 5-year period are largely in-line with the performance ratios that Coca-Cola experienced during 2003 and 2004. * Over-performance Period: This time period represents a scenario where Coca-Cola will continue to enjoy a competitive advantage, resulting in positive NPV investments through the forecasted horizon. ...
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...[pic] TAIRU BABATUNDE MUTIU 1, Awonsoso str., Olupoyi bustop Apata, Ibadan. Postal Address: P. O. Box 10538, Dugbe, Ibadan. Mobile: + 234(0) 8030461987 babatundetairu @yahoo.com PERSONAL PROFILE An adaptable and ambitious accounting graduate with an excellent understanding of the business & accounting Industry and processes and detecting quicking, deviation from company initial standard. A combination of years of customer services and accounting knowledge has provided the platform for remarkable achievements; hence, the ability to make a positive difference in all the organizations I have worked in. Being an organized, straight forward, result-oriented, innovative and principled individual, I would like to join a prevailing and first rate team, in order to facilitate a fusion of like minds and contribute immeasurable value to that team. EDUCATION University of ado ekiti, Ekiti State . Bsc Accounting (2002-2008) Federal Polytechnic, Ado- Ekiti, Ekiti State .National Diploma in Business Studies (2004-2007 Baptist secondary school ( S S C E (1992 -1999) Methodist Pry school, Oke- ado, Ibadan. ( 1st school leaving certificate (1986– 1991) PROFESSIONAL QUALIFICATIONS Institute of Chartered Accountant of Nigeria (In view) WORK HISTORY Sept 12-till date Infinity Goodwill...
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...FACULTY ECONOMICS AND BUSINESS EBA 6113 ACCOUNTING FOR MANAGERS INDIVIDUAL ASSIGNMENT ASSIGNMENT 1 (BASED ON CASE STUDY) LECTURER: MR. MICHAEL TINGGI DUE DATE: 9TH MARCH 2013 Done by: Satnam Singh 13030035 CASE 1 1.0 An accountant prepared a balance sheet for a business. In the balance sheet, the equity of the owner was shown next to the liabilities. This confused the owner, who argued: My equity is my major asset and so should be shown as an asset on the balance sheet. How would you explain this misunderstanding to the owner? As an accountant, we must first establish what the definition of asset is and what the definition of equity is. An asset is defined as a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefits (Gilbertson et al, 2008). Whereas, equity is the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses) invested to purchase assets, therefore cannot be recognized as asset (Gilbertson et al, 2008). The difference can be further explained by the Accounting equation of Assets, which shows: ASSETS = LIABILITIES + OWNER’S EQUITY From the equation we can derive that assets are comprised by liabilities and owner’s equity. Therefore, equity cannot be shown as an asset on the balance sheet because equity is the balance of assets minus the liabilities of the owner. So when we look at the Accounting...
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...Advanced Accounting Third Edition Susan S. Hamlen University at Buffalo, The State University of New York Ronald J. Huefner University at Buffalo, The State University of New York James A. Largay III Lehigh University Cambridge BUSINESS PUBLISHERS Cambridge Business Publishers ADVANCED ACCOUNTING, Third Edition, by Susan S. Hamlen, Ronald J. Huefner, and James A. Largay III. COPYRIGHT © 2016 by Cambridge Business Publishers, LLC. Published by Cambridge Business Publishers, LLC. Exclusive rights by Cambridge Business Publishers, LLC for manufacture and export. ALL RIGHTS RESERVED. No part of this publication may be reproduced, distributed, or stored in a database or retrieval system in any form or by any means, without prior written consent of Cambridge Business Publishers, LLC, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. STUDENT EDITION ISBN: 978-1-61853-151-3 Bookstores & Faculty: to order this book, call 800-619-6473 or email customerservice@cambridgepub.com. Students: to order this book, please visit the book’s Website and order directly online. Printed in Canada. 10 9 8 7 6 5 4 3 2 1 PREFACE W elcome to Advanced Accounting. We wrote this book with two major objectives in mind. First, we seek to reflect the changing topical emphases and content in the advanced accounting course; coverage is completely updated for new developments concerning...
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...Diligence Report The Coca-Cola Company AC 600 Professor: John Kocikowski Keller Graduate School of Management 10/30/2011 Table of Contents Industry Overview 3 Corporate Overview 5 Organization and General Corporate Issues 6 Treasury 8 References 14 Executive Summary The diversity at the Coca-Cola Company is evident with their presence in more than 200 counties. They feel that they are empowered within their business structure as well as the communities they serve because of their differences. Their attribute their success to their consistent values. They understand that their future growth is dependent upon their ability to develop a worldwide team that is rich in its diversity of people, cultures and ideas. Knowing that diversity is not limited to the internal structure of an organization, Coca-Cola has used this same approach regarding their suppliers. Through their supplier diversity program they are building relationships with minority and women owned businesses by giving them equal access to procurement opportunities. Coca-Cola plays a major player in its industry, not only in the U.S, but also all over the globe. Coke is single handedly the most popular soft drink anywhere, beating out its competition, Pepsi Co. Overseas, Coke has established its empire from South America to Africa to all of Asia and Europe. Coke is the world's top soft-drink company. The Coca-Cola Company owns four of the top five soft-drink brands (Coca-Cola, Diet Coke, Fanta...
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...PEPSICO CORPORATION STOCK ANALYSIS Presented by: St. John’s University Undergraduate Student Managed Investment Fund April 29, 2003 Recommendation: Purchase 400 shares of PepsiCo stock at market order Industry: Food and Beverage Kristopher Cartagena – kcart26@yahoo.com Dion Demetropoulos – Ddeme829@aol.com Tenisha Martin – tenishax@hotmail.com Share Data: Price - $42.65 Date – April 25, 2003 Target Price - $50.65 52 Week Price Range - $53.23 - $34.00 Market Capitalization – 74.5 billion Shares Outstanding – 1.72 billion Revenue 2002 – $25.112 billion Stock Chart: Fundamentals: P/E 2002 – 22x P/E 2003 – 19x Earnings Per Share Estimate: EPS 2003E = $2.28 EPS 2003 Consensus = $2.20 EPS 2004E = $2.45 EPS 2004 Consensus = $2.44 MEMORANDUM TO: Student Managed Investment Fund St. John’s University FROM: Kristopher Cartagena Dion Demetropoulos Tenisha Martin DATE: April 29, 2003 SUBJECT: ANALYSIS OF PEPSICO STOCK AS AN UNDERVALUED SECURITY This is the research report that was requested on January 23, 2003 about PepsiCo stock and whether it should be incorporated in to the Student Managed Investment Fund. The analysis was done primarily through secondary research. The analysis revealed that PepsiCo’s stock is currently undervalued at $42.65, as of April 25, 2003. We used a relative valuation model, and determined PepsiCo’s target price to be $50.65. In addition, we used a multi-stage dividend discount model, and determined...
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...PEPSI COLA [pic] Introduction: Pepsi Cola started in the January 1898, from a small Drug store in the city of North Carolina. The owner of the Drug store, Mr. Caleb Bradham, prepared a drink, which the customers called "the Bred Drink". Bred registered this drink with the name of Pepsi Cola in 1903. Then he started his own production at Marco level and established his own company. The business expanded and this drink got fame time. In 1909 this company reached to 24 states of America with more than 250 dealers. The very first packing of Pepsi was in 16.5 ounce. In 1932 Pepsi cola has introduced its new packing in 12 ounce. In 1950 Pepsi Cola has started its new Advertising Campaign with the name of "Refresh without Filling". It also changed the chemical formula and decreased its sweetness and calories. With the efforts of the Sales & Marketing Department, Pepsi got so much fame that it established new plants at a rate of thirty per annum. In 1985 the design of the bottle has been changed after 20 years. And a new and attractive packaging has been offered with two new flavor i.e., Teem & Mirinda. Today Pepsi is available in more than 160 countries of the world including Soviet Union & China. HISTORY OF PEPSI COLA: 2001 Pepsi puts "a little twist on a great thing," introducing lemon-flavored Pepsi Twist and Diet Pepsi Twist. The product launch marks the return to lemon-flavored...
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...“MARKET SURVEY OF RIGHT EXECUTION FOR COCA COLA“ PROJECT REPORT 2009 Submitted for the partial fulfillment of the requirement for the award Of MASTER OF BUSINESS ADMINISTRATION SUBMITTED BY NITIN TYAGI 0823170410 UNDER THE SUPERVISION OF External: Mr. Alok Agarawal (Area Sales Manager) Internal: Mr. Neeraj Kumar (Lecturer) Department of Management R.D.ENGINEERING COLLEGE, DUHAI, GHAZIABAD 1 DECLARATION I here by declare that this project report prepared in lieu of a compulsory paper for the partial fulfillment of Management of Business Administration (HR and Marketing) is my original work which I have submitted in Coca Cola to my guide Mr. Neeraj Kumar. No part of it has been submitted to any other university or organization. All the information and data in my project are authentic to the best of my knowledge and taken from reliable sources. Nitin Tyagi 2 ACKNOWLEDGEMENT Survey is the team project, while my name is on the cover page of this project, literally many of people have contributed to this summer training Project report. Every work requires a commitment but this commitment goes in rain when there is no guidance. I am extremely thankful to Mr. SAMEER MANDAL (Sr. Sales Executive) under whose able guidance I have worked on this survey & for his willing and every available cooperation through out the project. Last but not the least; I acknowledge with thanks the valuable suggestions of Mr. Sandeep Yadav & all my friends and all of my wishers...
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...Introduction In the era of information technology, current business has been operated completed differently from previous. Of course, financial market also become more and more complicated in order to associate with change of business structure. Consequently, this had led to rising of financial risk to investors invisibly. Hence, investors would like to speculate and hedge the financial risk as much as possible when do financial decision. Derivative financial instruments such as options, futures and others have been introduced and more commonly used to manage financial risk for improving decision making in this dynamic competitive environment. Options are defined as securities which one party has the right (no obligation) to buy or sell underlying assets with certain price within a certain/specific period of time (Hull, 2012). The option can be either call (right to buy) or put (right to sell) in the form of American options (exercised any time until expiry date) or European options (exercised on expiry date) as either traded options (standard option contracts) or overt-the-counter options (tailor made options). Due to various choices of options, different option pricing models such as Put-Call Parity, Black-Scholes, Cox-Rubenstein Binominal, Risk-Neutral valuation, the Greeks and others has been developed and applied in current financial market. Black-Scholes Option Pricing Model (BS) BS is designed and introduced by Fisher Black and Myron Scholes in 1973...
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...Coca-Cola: International Business Strategy For Globalization Dr. Michael Ba Banutu-Gomez, Professor, Management and Entrepreneurship, William G. Rohrer College of Business Rowan University, Glassboro, NJ ABSTRACT The purpose of this research was to analyze the efficiency of global strategies. This paper identified six key strategies necessary for firms to be successful when expanding globally. These strategies include differentiation, marketing, distribution, collaborative strategies, labor and management strategies, and diversification. Within this analysis, we chose to focus on the Coca-Cola Company because they have proven successful in their international operations and are one of the most recognized brands in the world. We performed an in-depth review of how effectively or ineffectively Coca-Cola has used each of the six strategies. The paper focused on Coca-Cola's operations in the United States, China, Belarus, Peru, and Morocco. The author used electronic journals from the various countries to determine how effective Coca-Cola was in these countries. The paper revealed that Coca-Cola was very successful in implementing strategies regardless of the country. However, the author learned that CocaCola did not effectively utilize all of the strategies in each country. Key Words: Coca-Cola, International Business, Strategy, Globalization, International Marketing, Labor Relations, Distribution, Diversification, Management, Channels, Costs, Gains and Collaboration. INTRODUCTION...
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