STARBUCKS

Go to Yahoo Finance and look for the stock information for the company.

Answer the following (In a table format in excel see uploaded file in Learn)

What is the most recent stock price listed (Write the Date)

How many shares outstanding does the company have outstanding?

What is the market value of the equity or market capitalization?

What is the most recent dividend paid

What is the stocks Beta

On Yahoo!, go to the bonds link. https://finance.yahoo.com/bonds What is the 3-month Treasury Bill Yield? (Remember that these values are in percentages so if quote states it is 1.23 it would equal 1.23%)

Assuming a market risk premium of 7% (check out chapter 10 for statistics behind this number), calculate the cost of equity using CAPM model.

Calculate the cost of equity using the dividend discount model. (Go to SEC Edgar and look at the last 10-K report.)-Look at dividends paid for the historical periods reported ( You can find it on the CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) ) and calculate the dividend growth rate. Can you calculate the cost of equity using this method?

What is the cost of capital using questions g and h above. (Calculate and Average)

You need to calculate the cost of debt for the Company. Please download the provided File: Starbucks debt, bond, rates, credit Morningstar.pdf which includes the current pricing of SBUXs bonds. You will need to fill in the provided table on the excel worksheet to calculate the cost of debt. (In case you ever need to find Ways to find bond pricing, it is included in Appendix 1) For term loans and revolving bank facilities information has been provided on the excel worksheet. You can also look at the link:

Like you did in the first project, Search on the SEC Edgar data base and find the Starbucks most recent 10-K report. Under the tabs notes to financial statements and/or tables for financial statements look for the tab on DEBT. Specifically under the section called Notes What is the book value of the notes/bonds ? How many bonds (Notes) were issued? Assume that each bond (note) has a face value of $1000.

Calculate the weighted average cost of debt both using Book Value and Market Value of the bonds and compare. What effect would using one over the other have when you calculate the cost of debt? (Note in the case of bank debt use the book value of the debt for both calculations)

You now have the necessary information to calculate the WACC of the Company. Calculate it using Book Value weights and Market weights and compare.

Part 1 for info that not Points Obtained 30 0 Total a. What is the most recent stock 0.5 b. How many shares outstanding does the company have outstanding? 0.5 c. What is the market value of the equity or market capitalization? d. What is the most recent 0.5 0.5 e. What is the stock's Beta f. On Yahool, go to the bonds link What is the 3-month Treasury Bil Yield? g. Assuming a market risk premium of 7% (check out chapter 10 for statistics behind this number), calculate the cost of equity using CAPM model h. Calculate the cost of equity using the dividend discount model. (Go to SEC Edgar and look at the last 10-K report. Look at dividends paid for the historical periods reported and calculate the dividend growth rate. Can you calculate the cost of equity using this method? i. What is the cost of capital using questions g and h above E(Ri)-Rf + [E(RM)-Rf] Re Dox(1-8)/Po8 Part 1 for info that not Points Obtained 30 0 Total a. What is the most recent stock 0.5 b. How many shares outstanding does the company have outstanding? 0.5 c. What is the market value of the equity or market capitalization? d. What is the most recent 0.5 0.5 e. What is the stock's Beta f. On Yahool, go to the bonds link What is the 3-month Treasury Bil Yield? g. Assuming a market risk premium of 7% (check out chapter 10 for statistics behind this number), calculate the cost of equity using CAPM model h. Calculate the cost of equity using the dividend discount model. (Go to SEC Edgar and look at the last 10-K report. Look at dividends paid for the historical periods reported and calculate the dividend growth rate. Can you calculate the cost of equity using this method? i. What is the cost of capital using questions g and h above E(Ri)-Rf + [E(RM)-Rf] Re Dox(1-8)/Po8