Autumn CF Assignment - London School of Business & Finance...

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London School of Business & Finance (LSBF) MBA/ MSC Finance Module Corporate Finance Assignment Title PepsiCo’s Capital Structure Choice Assignment Type Essay Word Limit 3500 +- 10% Weighting 50% Student Cohort Intake 5 Issue Date 5 th November 2010 Submission Date 16 th December 2010 Feedback Date Issued by (Assessor) Augustin Entonu Internal Verifier Plagiarism When submitting work for assessment, students should be aware of the LSBF guidance and regulations in concerning plagiarism. All submissions should be your own, original work. You must submit an electronic copy of your work. Your submission will be electronically checked. Harvard Referencing The Harvard Referencing System must be used. The Wikipedia website must not be referenced in your work. Learning Outcomes On successful completion of this assignment you will be able to: Identify principles and trends in the corporate finance. Determine and evaluate the nature of different source of finance. Demonstrate deep and systemic knowledge in the sphere of corporate finance development. Demonstrate effective approaches to analyzing corporate finance structure Possess the ability to plan and implement tasks at professional level; make decisions in complex and unpredictable context of using rational decision- making approach Grading Criteria Please see separate Assignment Grading Criteria Autumn 2010 sheet for this Assignment.
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Your Task PepsiCo, Inc. (PepsiCo) is the world leader in the snack food business, and it is a strong number two in soft drinks (or maybe number 1). It has more than two dozen well- established consumer brands, including Doritos, Fritos, Ruffles, and Lay’s (snack foods); and Pepsi-Cola, Diet Pepsi, and Mountain Dew (soft drinks). In recent years, PepsiCo has pursued several initiatives designed to expand international sales. To take advantage of overseas opportunities, PepsiCo has begun a major overhaul of its foreign beverage operations. This effort included redesigning the firm’s soft drink cans and bottles and changing Pepsi- Cola’s distinct ive red, white, and blue packaging to an all- blue design. Overview of PepsiCo PepsiCo was formed in 1965 when the Pepsi-Cola Company merged with Frito-Lay Inc. Over the next 30 years, net sales grew at an average compound rate of 15% per year, with sales doubling about every five years. Exhibit 1 furnishes income statements for PepsiCo, and Exhibit 2 furnishes balance sheets. PepsiCo has book liabilities of $18.1 billion and book value of stockholders’ equity of $7.3 billion. The market value of Pep siCo’s stockholders’ equity is much greater. With 788 million common shares outstanding and a share price of $55.875, the market value of its stockholders’ equity is $44.0 billion, roughly six times its book value. Capital Spending
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This note was uploaded on 12/13/2010 for the course FINANCE FC taught by Professor Andrew during the Spring '10 term at Birmingham City University.

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Autumn CF Assignment - London School of Business & Finance...

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