Pepsi Co 's Product Portfolio Essay

Weighted Average Cost of Capital (WACC) is the combined rate at which a company repays borrowed capital and comes from debit financing and equity capital. WACC can be reduced by cutting debt financing costs, lowering equity costs, and capital restructuring. In order to minimize WACC, companies can issue bonds by lowering the interest rate they offer to investors as well as, cutting down

The mixture of debt-equity mix is important so as to maximize the stock price of the Costco. However, it will be significant to consider the Weighted Average Cost of Capital (WACC) as well so that it can evaluate the company targeted capital structure. Cost of capital (OC) may be used by the companies as for long term decision making, so industries that faced to take the important of Cost of capital seriously may not make the right choice by choosing the right project(Gitman’s, ).

Weighted average cost of capital (WACC) is a calculation of a firm’s cost of capital which each type of capital is proportionately weighted. WACC is used as a discount rate for investment appraisal. Hence, calculating WACC of a firm is important.

Moreover, let’s calculate the Weighted Average Cost of Capital (WACC). And in order to calculate it we need to know the capital structure of the company. Knowing the capital structure of the

PepsiCo is a global food and beverage corporation based in United States. Company received its current name in 1965, through the merger of Pepsi-Cola with Frito Lay Inc. PepsiCo makes, markets, sells and distributes more than 40 brands. A range of worldwide famous brand names includes Pepsi, Mountain Dew, Lay’s, Doritos, Quaker, Tropicana, Tostitos, Walkers, Cheetos, Ruffles, Fritos and others. PepsiCo generated net revenues of more than USD 65 billion in 2013, where 35% of revenue from developing and emerging markets (PepsiCo Annual Report). Pepsi products are available in more than 200 countries. The company has its own bottling manufacture and distribution facilities. Pepsi-Cola Company division is the second largest carbonated soda business in the world and the Frito-Lay division is the world’s leader in snacks business. The Frito-Lay generates more than 65% of PepsiCo 's net sales and more than 2/3 of the PepsiCo operating

For this reason, new, or marginal, costs are used in its calculation. WACC is calculated by multiplying the cost of each capital component by its proportional weight and then summing then together. The capital components included in this calculation are a firms after-tax costs of debt, preferred stock, and common stock.

Pepsi started its journey in 1998.It was invented by a pharmacist named ‘Caleb bardham’. This brand is operating business in more than 200 countries.

WACC is the appropriate discount rate to use for cash flows with risk that is similar to that of the overall firm. Hansson is concerned that the risk of this project is not similar to the risk of current overall firm’s activities. With this project, the company was taking on much more debt and, Hansson believed that, this project could very well change the risk profile of the firm.

WACC is the Weighted Average Cost of Capital, which provides an average return for all of a

One of the strengths that can be found in PepsiCo is in term of strong brand equity. PepsiCo has a strong brand name in the world place and the company is well-known worldwide. This company is the best global brand in the world in terms of value of net revenue $43,251 million in the year of 2008. The company has a very recognized and

Despite this change in price, the Weighted Average Cost of Capital (WACC) will give a more accurate representation of what the change in capital structure implies for the firm, by taking account the costs of debt.

All of these calculated figures can then be used to calculate the WACC which is (17% x 3.47%) + (83% x 11.2%) = 9.87% WACC. This WACC percentage can then be used to value the investment and as a comparative in valuation methods. The full calculation and numerical values are shown in Appendix 1.

This research paper pinpoints the financial analysis of Pepsi Co, Inc., namely its profitability; liquidity; solvency and operating outcome with respect to its competitors, Coca-Cola Inc., and Dr. Pepper Snapple Group. The upshot of Pepsi’s financial breakdown will assist the soda drink maker to improve its production approach and keep its flagship brand aggressive and competitive.

Pepsico formed in 1965 and it is a global renowned softdrink brand which has 22 brands in 200 countries worldwide. It is an American multinational cooperation Headquarters situated in New York United States and which is the second largest food and Beverages Company in the world.

PepsiCo has 22 diverse product lines that provides a diversity of high quality products giving refreshment and nutrition.