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63 B C 1 Fill in the blanks (yellow) and calculate WACC for both companies based on the information below. 2 Coca-Cola Co. PepsiCo 3 Short term borrowings 3,600 202 4 CPLTD (curent portion of LTD) 154 281 5 LTD 681 2,106 6 Total debt 4,435 2,589 7 8 Share price 44 9 Outstanding shares 2,477 1,446 10 Market value of equity 155,432 63,349 11 12 Total debt and equity 159,867 65,938 13 14 Weight of debt, W. 2.8% 3.9% 15 Weight of equity, W. 97.2% 96.1% 16 17 18 Coca-Cola Co. PepsiCo 19 Cost of debt 4.67% 4.81% 20 Cost of equity 8.06% 7.96% 21 wd (from above) 2.8% 3.9% 22 We (from above) 97.2% 96.1% 23 24 WACC 8.0% 7.8% 25 A B C D E F G H J K 1 Fill in the blanks (yellow) and calculate EVA for both companies. Compare their EVA in the word document. 2 EVATM Calculation, Coca-Cola Co EVAT Calculation, PepsiCo 3 2001 2002 2003 2001 2002 2003 4 Operating profit 5,399 6,132 6,633 Operating profit 4,385 4.885 5,369 5 Add back: goodwill amortization 295 295 295 Add back: goodwill amortization 236 295 295 6 Less: cash taxes (1,738) (1,957) (2,131) Less: cash taxes (1.142) (1,245) (1,504) 7 NOPAT 7,432 8,384 9,059 NOPAT 5,763 6,425 7,168 8 3,400 2 526 9 10 Loans and notes payable 11 Current portion of long-term debt 12 Long-term debt 13 Deferred income taxes 14 Equity 15 Accumulated losses 16 Accumulated goodwill amortization 17 Less: marketable securities 18 Invested capital 19 20 Return on invested capital 21 22 WACC (from Task 2) 23 24 ROIC-WACC spread 25 26 Value created destroyed (EVA) 3,600 3,500 154 153 681 528 302 239 11,267 11,898 2,722 2,722 487 782 (2,364) (2,364) 21,577 22,186 170 12.368 2,722 1,077 (2,364) 22,629 Short term borrowings Current portion of long-term debt Long-term debt Deferred income taxes Equity Accumulated losses Accumulated goodwill amortization Less: marketable securities Invested capital 202 281 2,106 1.625 9,282 1,394 987 444 64 1,825 1,381 1.974 2.252 11,648 11,382 1,394 1,394 1,282 1,577 (1,000) (500) 19,567 18,550 15,877 34.4% 37.8% 40.0% Return on invested capital 36.3% 32.8% 38.6% WACC (from Task 2) ROIC-WACC spread Value created destroyed (EVA)

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