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Green Mountain Coffee Roasters

Green Mountain Coffee Roasters. Matt Moore. Background. Started as small café in Vermont Organic and Fair-Trade Coffee Keurig Machines & K-Cups Sell to wholesale Customers Most of sales from K-Cups Highest margins are on K-Cups . Competitors. Recap Mod 6. Cost of Equity CAPM.

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Green Mountain Coffee Roasters

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  1. Green Mountain Coffee Roasters Matt Moore

  2. Background • Started as small café in Vermont • Organic and Fair-Trade Coffee • Keurig Machines & K-Cups • Sell to wholesale Customers • Most of sales from K-Cups • Highest margins are on K-Cups

  3. Competitors

  4. Recap Mod 6

  5. Cost of Equity CAPM

  6. Cost of Debt 10-K: 4.0% Calculated using int exp: 7.2% Significant difference, will use 10-K.

  7. Cost of Operating Capital

  8. Credit Rating Sept 2013: S&P upgraded from GMCR Credit Rating from “BB-” to “B+” Positive change, but still not considered “High Grade, High Quality”

  9. Betas

  10. Betas Wide variety of different betas Beta I calculated in the middle 95% CI: -.079  2.25 Both NASDAQ above CI, Bloomberg close

  11. Valuing GMCR

  12. Uncertainty There is a lot of uncertainty around CMCR While the Sales & R&D are greatly improving, betas are scattered across the board, WACC is high, and credit rating is low Hard to predict future given such contradictory factors

  13. Questions

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