For JNJ, what is the cost of equity (a.k.a. required return on equity) using the Gordon Growth model? Question options: 7.3% 9% 3% 11% 18%
For JNJ, what is the cost of equity (a.k.a. required return on equity) using the Gordon Growth model?
Question options:
For JNJ, what is the cost of equity using the CAPM approach? Round to nearest whole percentage.
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For JNJ, what is the pre-tax cost of debt (YTM) using current market information?
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What is JNJ's tax rate for the last year?
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For JNJ, what is the amount of total capital (assume no preferred stock)
Question options:
| | $315bn |
| | $405bn |
| | $496bn |
| | $40bn |
For JNJ, what is the WACC? Assume you use the average of Gordon Growth and CAPM for the cost of equity.
Question options:
| | 2.8% |
| | 9.8% |
| | 8.4% |
| | 15.3% |
| | 10.4% |
| | 3.4% |
Johnson and Johnson - For use with WACC Assessment Johnson & Johnson (JNJ) Add to watchlist 88 Visitors trend 2W + 10 9M M NYSE - NYSE Delayed Price. Currency in USD 142.09 -0.12 (-0.08%) 142.25 +0.16 0.11%) At close: June 21 4:00PM EDT Pre-Market: 8:47AM EDT Buy Sell Summary Company Outlook Chart Conversations Statistics Historical Data Profile Financials Analysis Options Hob Previous Close 142.21 Market Cap 377.2578 1D 5D 1M 6M YTD 1Y SY Max M - Full screen 142.80 Open 141.46 Beta (3 Monthly 0.73 Bid 142.26 x 900 PE Ratio (TTM 26.33 142.18 Ask 142.50 x 1000 EPS (TTM) 5.40 141.460 Day's Range 141.01 - 142.43 - Jul 16, 2019 19 140.00 52 Week Range 120.11 - 148.99 Earnings Date Forward Dividend & Yield Ex-Dividend Date 3.80 2.67%) Volume 11,137,199 2019-05-24 10 AM 12 PM 2 PM 2 4 PM Avg Volume 6.706,777 1y Target Est 149.17 Trade prices are not sourced from al markets Analyst Recommendation by Agusah BUY Fair Value Views Overvalued AL N Short Term 1 Mid To Long Term All News Press Releases Research Reports Ex/ Dato Type Cash Amount Declaration Date Record Date Payment Date 5/11/2019 5/24/2018 Cash 0.95 4/25/2019 5/212019 2/25/2019 Cash 0.9 1/2/2019 2/26/2019 3/12/2019 12/11/2016 11/26/2018 Cash 0.9 10/18/2016 11/27/2018 8/27/2018 Cash 0.9 7/16/2018 8/28/2018 9/1/2018 5/25/2018 Cach 0.9 4/26/2018 5/29/2018 6/12/2018 2/26/2010 Cach 0.54 1/2/2018 2/27/2018 3/13/2018 11/27/2017 Cash 0.84 10/19/2017 11/28/2017 12/12/2017 8/25/2017 Cash 0.84 7/17/2017 8/20/2017 9/12/2017 5/25/2017 Cach 0.84 4/27/2017 5/30/2017 6/13/2017 2/24/2017 Cat 0.8 1/3/2017 2/28/2017 3/14/2017 11/18/2016 Cash 0.B 10/21/2016 11/22/2016 12/6/2010 3/19/2016 Cash 0.B 7/18/2016 8/23/2016 9/8/2016 5/20/2016 Cash 0.8 4/28/2010 5/24/2018 B7/2016 2/19/2016 Cash 0.75 1/4/2016 2/23/2016 3/8/2016 11/20/2015 0.75 10/22/2016 11/24/2015 12/8/2015 8/21/2015 Cash 0.75 7/20/2015 8/25/2015 9/9/2015 5/21/2015 Cash 0.75 4/23/2015 8/20/2015 3/9/2015 2/20/2016 C 0.7 1/5/2015 2/24/2015 3/10/2015 12/9/2014 11/21/2014 Cash 0.7 10/16/2014 11/25/2014 8/22/2014 07 7/21/2014 8/20/2014 9/9/2014 5/22/2014 Cash 0.7 4/24/2014 5/27/2014 B/10/2014 Other Assumptions: 1. Market return for equities - 11% 2. Risk free rate - 3% 3. JNJ has a 10-year bond issue that is currently priced at 102. It was issued three years ago with a coupon rate of 2.45%. Use this bond's YTM as a pre-tax cost of long-term debt. JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS At December 30, 2018 and December 31, 2017 (Dollars in Millions Except Share and Per Share Amounts) (Note 1) 2018 2017 Assets 18.107 1.580 14.098 8,599 2,699 950 17,824 472 13.490 8,765 2,537 46,033 43.088 17.035 47.611 30453 7,640 4.182 152,954 17.005 53,228 31,906 7,105 4.971 157,303 S Current assets Cash and cash equivalents (Notes and 2) Marketable securities (Notes 1 and 2) Accounts receivable trade, less allowances for doubtful accounts $248 (2017, S291) Inventories (Notes and 3) Prepaid expenses and other receivables Assets held for sale (Note 20) Total current assets Property, plant and equipment, net (Notes and 4) Intangible assets, net (Notes and 5) Goodwill (Notes and 5) Deferred taxes on income (Note 8) Other assets Total assets Liabilities and Shareholders' Equity Current liabilities Loans and notes payable (Note 7) Accounts payable Acenied liabilities Accrued rebates, retums and promotions Accrued compensation and employee related obligations Accrued taxes on income (Note 8) Total current liabilities Long-term debt (Note 7) Deferred taxes on income (Note 8) Employee related obligations (Notes 9 and 10) Long-term taxes payable (Note 8) Other liabilities Total liabilities Shareholders' equity Preferred stock - without par value authorized and unissued 2,000,000 shares) Common stock - par value $1.00 per share (Note 12) (authorized 4,320,000,000 shares; issued 3,119,843,000 shares) Accumulated other comprehensive income (loss) (Note 13) Retained camings 2,796 7.537 7.601 9,380 3,098 818 31.2.30 3,906 7,310 7,304 7,210 2,953 1.854 30.537 30.675 8,368 10.074 8472 9,017 97.143 27,684 7,506 9.951 8,242 8.589 93.202 3,120 (15.222) 106,216 94.114 34,362 59,752 3,120 (13,199) 101.793 91,714 31,554 60.160 Less: common stock held in treasury, at cost (Note 12) (457,519,000 shares and 437,318,000 shares) Total shareholders' equity Total liabilities and shareholders' equity S 152,954 157,303 See Notes to Consolidated Financial Statements JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1) 2017 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8) Net earnings 2018 81,581 27,091 54.490 22,540 10,775 1,126 (611) 1,005 1.405 251 17,999 2,702 15.297 76,450 25,439 51,011 21.520 10,594 408 (385) 934 (42) 309 17,673 16,373 1,300 Johnson and Johnson - For use with WACC Assessment Johnson & Johnson (JNJ) Add to watchlist 88 Visitors trend 2W + 10 9M M NYSE - NYSE Delayed Price. Currency in USD 142.09 -0.12 (-0.08%) 142.25 +0.16 0.11%) At close: June 21 4:00PM EDT Pre-Market: 8:47AM EDT Buy Sell Summary Company Outlook Chart Conversations Statistics Historical Data Profile Financials Analysis Options Hob Previous Close 142.21 Market Cap 377.2578 1D 5D 1M 6M YTD 1Y SY Max M - Full screen 142.80 Open 141.46 Beta (3 Monthly 0.73 Bid 142.26 x 900 PE Ratio (TTM 26.33 142.18 Ask 142.50 x 1000 EPS (TTM) 5.40 141.460 Day's Range 141.01 - 142.43 - Jul 16, 2019 19 140.00 52 Week Range 120.11 - 148.99 Earnings Date Forward Dividend & Yield Ex-Dividend Date 3.80 2.67%) Volume 11,137,199 2019-05-24 10 AM 12 PM 2 PM 2 4 PM Avg Volume 6.706,777 1y Target Est 149.17 Trade prices are not sourced from al markets Analyst Recommendation by Agusah BUY Fair Value Views Overvalued AL N Short Term 1 Mid To Long Term All News Press Releases Research Reports Ex/ Dato Type Cash Amount Declaration Date Record Date Payment Date 5/11/2019 5/24/2018 Cash 0.95 4/25/2019 5/212019 2/25/2019 Cash 0.9 1/2/2019 2/26/2019 3/12/2019 12/11/2016 11/26/2018 Cash 0.9 10/18/2016 11/27/2018 8/27/2018 Cash 0.9 7/16/2018 8/28/2018 9/1/2018 5/25/2018 Cach 0.9 4/26/2018 5/29/2018 6/12/2018 2/26/2010 Cach 0.54 1/2/2018 2/27/2018 3/13/2018 11/27/2017 Cash 0.84 10/19/2017 11/28/2017 12/12/2017 8/25/2017 Cash 0.84 7/17/2017 8/20/2017 9/12/2017 5/25/2017 Cach 0.84 4/27/2017 5/30/2017 6/13/2017 2/24/2017 Cat 0.8 1/3/2017 2/28/2017 3/14/2017 11/18/2016 Cash 0.B 10/21/2016 11/22/2016 12/6/2010 3/19/2016 Cash 0.B 7/18/2016 8/23/2016 9/8/2016 5/20/2016 Cash 0.8 4/28/2010 5/24/2018 B7/2016 2/19/2016 Cash 0.75 1/4/2016 2/23/2016 3/8/2016 11/20/2015 0.75 10/22/2016 11/24/2015 12/8/2015 8/21/2015 Cash 0.75 7/20/2015 8/25/2015 9/9/2015 5/21/2015 Cash 0.75 4/23/2015 8/20/2015 3/9/2015 2/20/2016 C 0.7 1/5/2015 2/24/2015 3/10/2015 12/9/2014 11/21/2014 Cash 0.7 10/16/2014 11/25/2014 8/22/2014 07 7/21/2014 8/20/2014 9/9/2014 5/22/2014 Cash 0.7 4/24/2014 5/27/2014 B/10/2014 Other Assumptions: 1. Market return for equities - 11% 2. Risk free rate - 3% 3. JNJ has a 10-year bond issue that is currently priced at 102. It was issued three years ago with a coupon rate of 2.45%. Use this bond's YTM as a pre-tax cost of long-term debt. JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS At December 30, 2018 and December 31, 2017 (Dollars in Millions Except Share and Per Share Amounts) (Note 1) 2018 2017 Assets 18.107 1.580 14.098 8,599 2,699 950 17,824 472 13.490 8,765 2,537 46,033 43.088 17.035 47.611 30453 7,640 4.182 152,954 17.005 53,228 31,906 7,105 4.971 157,303 S Current assets Cash and cash equivalents (Notes and 2) Marketable securities (Notes 1 and 2) Accounts receivable trade, less allowances for doubtful accounts $248 (2017, S291) Inventories (Notes and 3) Prepaid expenses and other receivables Assets held for sale (Note 20) Total current assets Property, plant and equipment, net (Notes and 4) Intangible assets, net (Notes and 5) Goodwill (Notes and 5) Deferred taxes on income (Note 8) Other assets Total assets Liabilities and Shareholders' Equity Current liabilities Loans and notes payable (Note 7) Accounts payable Acenied liabilities Accrued rebates, retums and promotions Accrued compensation and employee related obligations Accrued taxes on income (Note 8) Total current liabilities Long-term debt (Note 7) Deferred taxes on income (Note 8) Employee related obligations (Notes 9 and 10) Long-term taxes payable (Note 8) Other liabilities Total liabilities Shareholders' equity Preferred stock - without par value authorized and unissued 2,000,000 shares) Common stock - par value $1.00 per share (Note 12) (authorized 4,320,000,000 shares; issued 3,119,843,000 shares) Accumulated other comprehensive income (loss) (Note 13) Retained camings 2,796 7.537 7.601 9,380 3,098 818 31.2.30 3,906 7,310 7,304 7,210 2,953 1.854 30.537 30.675 8,368 10.074 8472 9,017 97.143 27,684 7,506 9.951 8,242 8.589 93.202 3,120 (15.222) 106,216 94.114 34,362 59,752 3,120 (13,199) 101.793 91,714 31,554 60.160 Less: common stock held in treasury, at cost (Note 12) (457,519,000 shares and 437,318,000 shares) Total shareholders' equity Total liabilities and shareholders' equity S 152,954 157,303 See Notes to Consolidated Financial Statements JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1) 2017 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8) Net earnings 2018 81,581 27,091 54.490 22,540 10,775 1,126 (611) 1,005 1.405 251 17,999 2,702 15.297 76,450 25,439 51,011 21.520 10,594 408 (385) 934 (42) 309 17,673 16,373 1,300
