The frappuccino is a typical product line of blended coffee beverages sold by Starbucks. It consists of coffee blended with ice and various other ingredients, usually topped with whipped cream. Frappuccinos are also sold as bottled coffee beverages in stores and from vending machines. Launched as an experiment in a California Starbucks, the frappuccino went national about 15 years ago and soon became a popular alternative to hot drinks. It looks like in a long term of life. Because Starbucks is hoping its sales will help offset the seasonal slowing of hot-coffee sales during summer. Any boost in frappuccino orders also would strengthen a weak portion of the Starbucks day—the afternoon, when iced drinks are most popular. Currently the frappuccino make up its U.S. sales about 10% of the coffee giant's revenue. The future of this product line is likely continued popular, because in 2010 the company launched a customized frappuccino, calling it the "however-you-want-it frappuccino". It allows customers to order the drink with soy milk instead of dairy, decaffeinated instead of caffeinated coffee, and far fewer calories. It would be the latest success for Starbucks.
Capital structure choices:
Starbucks debt to equity ratio in December, 2011 is 0.1151. This ratio indicating the relative proportion of shareholders’ equity and debt used to finance Starbuck’s assets. During the five years we can see Starbucks have a average ratio on 0.2764. It is quite low debt to equity ratio. That indicates a lower risk because shareholder’s have claims on a larger portion of the company’s assets. Starbucks paid cash dividends to its investors in March, 2010. It is the first time for its 18-years as a public company. It was signaling confidence that its ambitious turnaround effort has taken hold.
For many years the company avoided significant long-term debt, but In August 2007, the Company issued $550 million of 6.25% Senior Notes (the “notes”) due in...
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