Company	PepsiCo Inc. ($000)	Coca-Cola Co. ($000)	Nestle S.A. (CHF000)
Ordinary Shares	1,200	1,000	1,500
10% Debentures	400	500	300
Total Capital	1,600	1,500	1,800

The return on capital employed was 14% for each firm in 2014, and in 2015 it was 9%. Corporation tax in both years was assumed to be 45%, and debenture interest is an allowable expense against corporation tax.

(a) Calculate the percentage return on the shareholders' capital for each company for 2014 and 2015. Assume that all profits are distributed. (b) Discuss the impact of gearing on the companies' profitability and risk.