Question
You are looking to evaluate Coca Cola (KO) in terms of their capital structure based on the following information. If their ROIC is 16.8%, are
You are looking to evaluate Coca Cola (KO) in terms of their capital structure based on the following information. If their ROIC is 16.8%, are they destroying or creating value for their shareholders? Be sure to first calculate KO's WACC, and then explain your rationale.
Risk Free Rate: 3%
Market Risk Premium 7.00%
Beta: 0.43
Cost of Debt: 2.00%
% of Debt: 30%
% of Equity: 70%
Tax Rate: 29%
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Valuation Measuring and managing the values of companies
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
5th edition
978-0470424650, 9780470889930, 470424656, 470889934, 978-047042470
