Question

Please Answer below Question considering Starbucks Annual Report 2018/ Financial Data of Starbucks from Gurufocus or Yahoo Finance, Identify the capital structure weights you will use, for equity, debt, and preferred stock. Calculate these percentages based on the appropriate dollar figures you have identified for that company. Explain each of your choices, based on information from the company's documents and market capitalization. Some companies have a great deal of short term debt, so you may want to add a fourth category, depending on your company. Many companies do not have preferred shares but some do. Calculate the WACC using the weights identified as well as the appropriate costs for each type of funds. Be sure and justify the beta that you used in the CAPM for your cost of equity. Each number used must have a source and its choice must be explained.

Answer 1

Starbucks Corporation (in multien) Amount & Percentage teleights cost of capital 58.35% Equity T4175.8 Obt. 9,090.2 Preferred Steck Nil Total capital 1 10,266 8.96% (fco cart 45 % (from Around Repoel) I 100% Appleging CAPM ke = R + B/Rm-R11 wing 10 ye vs Treasuty Bond Rak B & 27% Starbucks 8 = 0.32 and market sült premium 8 % This cost of equity of Starbucks = 2.1% & 0.82% 87. - 2.1% + 6.56 =$.96% WACC - Wex ke t Wd X kl. - 8.96% X 11.45 t 4.5% x 88.55 = 5:01