The Coca Cola Company

COURSEWORK

The Coca-Cola Company

CONTENT

INTRODUCTION 3
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INTRODUCTION

    1. GROUP REPORT

      1. Capital structure and WACC

A firm's WACC it's quite good measure to determine the economic feasibility to opportunities of expansionary and mergers. It is appropriate discount rate to use for cash flows with risk that is similar to the company as a whole.

Computing Coca-Cola Company’s WACC, assuming perfect capital market, the measurements given below represents necessary data.

Market capitalization for 24 February 2010

|Price per share                                                       |55.16                                                                 |
|Number of shares outstanding                                           |2306.00                                                               |
|Market capitalization                                                 |127198,96                                                             |

  Figure 1. Price per share for 24 February 2010
[pic]

According to this graph, the price per share on 24 February 2010, was the highest price, measuring from mentioned date till 11 of May 2010. This situation appeared when the Coca-Cola Hellenic Bottling Company S.A. announced about share buy-back. This is the alternative to increase dividends, furthermore buy-backs gives shareholders capital gains through boosting the price, instead of income.

According to Income Statement of 2010, Normalized Income Before Taxes was 2,225.0 million dollars and Normalized Income After Taxes was 1,658.0 million dollars. This buy-back method can minimize taxes, so in order to that, maybe The Coca-Cola Company tried to realized this buy-back advantage.

Average corporate tax rate: Net income before taxes / Provision for Income Taxes

|                                   |2007                               |2008... [continues]

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