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Processed and Packaged Goods Starbucks Corporation Module 7 : Valuation using the REI Valuation Model Angie Zhao. Starbucks • Green Mountain Coffee • J.M. Smucker • Mondelez International. STARBUCKS. Rates and Ratios. Cost of enterprise capital ( r Ent ) Calculated WACC 7.62%
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Processed and Packaged Goods Starbucks Corporation Module 7: Valuation using the REI Valuation Model Angie Zhao Starbucks •Green Mountain Coffee •J.M. Smucker • Mondelez International
Rates and Ratios • Cost of enterprise capital (rEnt) • Calculated WACC 7.62% • WACC from Bloomberg 9.10% • Sales growth rates • 11% for first 5 years (2014 – 2018) • Fading at 1.7% per year for 5 years (2019 – 2023) to 2.5% in 2013 • Remain at 2.5% for 2024 and thereafter • EPM 10% • EATO 5.7
Residual Enterprise Income Model Share price (2/18/2014): $73.97 Market Cap: $55.91b BV of Equity: $5.11b
Discounted Cash Flow Model Share price (2/18/2014): $73.97 Market Cap: $55.91b BV of Equity: $5.11b
Residual Enterprise Income Model Share price (2/18/2014): $73.97 Market Cap: $55.91b BV of Equity: $5.11b
Discounted Cash Flow Model Share price (2/18/2014): $73.97 Market Cap: $55.91b BV of Equity: $5.11b