For the company Coca-cola: a. calculate Economic Value Added (EVA) over the most recent annual period. Assume...

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Finance

For the company Coca-cola:
a. calculate Economic Value Added (EVA) over the most recentannual period. Assume a 10 percent cost of capital and explain yourresults.
b. estimate the firm’s expected growth rate using the GordonGrowth Model and an expected return on the company’s stock of 10%.Compare these results with a close competitor.
c. estimate the firms’ weighted average cost of capital (WACC)after taxes. Use the capital asset pricing model (CAPM) to estimatethe cost of common stock equity. Use the yield-to-maturity on thefirms’ outstanding debt or an industry average to estimate the costof debt and a corporate tax rate of 21 percent. Compare andcontrast your result with that of a close competitor or industryaverage.
Market Summary > The Coca-Cola Co
FollowFollowing
NYSE: KO
48.19 USD +0.79 (1.67%)
Closed: May 10, 6:09 PM EDT · Disclaimer
After hours 48.19 0.00 (0.00%)
Max
48.25 USD ?4:30 PM
47.047.548.048.5Previous
close
47.40
12:00 PM4:00 PM8:00 PM
Open 47.41
High 48.30
Low 47.40
Mkt cap 205.58B
P/E ratio 30.71
Div yield 3.32%
Prev close 47.40
52-wk high 50.84
52-wk low 41.45
Not sure if this is what you are looking for.
I'm not sure if I am answering your question correctly, can Iassume the investment made is $1000

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Transcribed Image Text

For the company Coca-cola:a. calculate Economic Value Added (EVA) over the most recentannual period. Assume a 10 percent cost of capital and explain yourresults.b. estimate the firm’s expected growth rate using the GordonGrowth Model and an expected return on the company’s stock of 10%.Compare these results with a close competitor.c. estimate the firms’ weighted average cost of capital (WACC)after taxes. Use the capital asset pricing model (CAPM) to estimatethe cost of common stock equity. Use the yield-to-maturity on thefirms’ outstanding debt or an industry average to estimate the costof debt and a corporate tax rate of 21 percent. Compare andcontrast your result with that of a close competitor or industryaverage.Market Summary > The Coca-Cola CoFollowFollowingNYSE: KO48.19 USD +0.79 (1.67%)Closed: May 10, 6:09 PM EDT · DisclaimerAfter hours 48.19 0.00 (0.00%)Max48.25 USD ?4:30 PM47.047.548.048.5Previousclose47.4012:00 PM4:00 PM8:00 PMOpen47.41High48.30Low47.40Mkt cap205.58BP/E ratio30.71Div yield3.32%Prev close47.4052-wk high50.8452-wk low41.45Not sure if this is what you are looking for.I'm not sure if I am answering your question correctly, can Iassume the investment made is $1000