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What is this project? The purpose of this project is to analyze different aspects of corporate finance policies and to assess the effect of these

What is this project?

The purpose of this project is to analyze different aspects of corporate finance policies and to assess the effect of these policies on the value the managements of these firms create for their shareholders.

The companies chosen are PEPSI AND COCA COLA

Each question must be answered in one page length

Capital Structure

Choices

  • What are the different kinds or types of financing that this company has used to raise funds? Where do they fall in the continuum between debt and equity?
  • How large, in qualitative or quantitative terms, are the advantages to this company from using debt?
  • How large, in qualitative or quantitative terms, are the disadvantages to this company from using debt?
  • From the qualitative trade off, does this firm look like it has too much or too little debt?

Dividend Policy

  • How has this company returned cash to its owners? Has it paid dividends, bought back stock or spun off assets?
  • Given this firm's characteristics today, how would you recommend that they return cash to stockholders (assuming that they have excess cash)?

A Framework for

Analyzing

Dividends

  • How much could this firm have returned to its stockholders over the last few years? How much did it actually return?
  • Given this dividend policy and the current cash balance of this firm, would you push the firm to change its dividend policy (return more or less cash to its owners)?
  • How does this firm's dividend policy compare to those of its peer group and to the rest of the market?

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Capital structure The two companies have different approaches to financing For example Coca Cola has focused on issuing debt while Pepsi Co has relied more on equity financing C oca Cola has financed ... blur-text-image

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