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Essay Archive - Executive Summary of Pepsico
Executive Summary of Pepsico
Through my research of Pepsico, I have calculated the cost of capital. A
firm's cost of capital is imperative because it represents the funds used to
finance the firm's assets and operations. First you have to estimate the cost
of capital in order to minimize it.
In estimating the cost of capital, you first have to find the cost of
each capital component and then combine the component costs to find the weighted
average cost of capital. First, I calculated the cost of debt. Pepsico's bond
consisted of 7 5/8 coupon rate, maturing in 1998 at a price of $1023.80. I
figured the payments....
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