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For this problem, use the following Cash Flow Statement for Coca Cola for year 2022. All numbers are in millions .a) What was the Total Payout Rate for Coca Cola in 2022? b) Coca Cola had 4,3 billion shares outstanding at the end of 2022. What is Coca Cola’s EPS? Assuming Coca Cola’s EPS in 2023 will be 5% higher, estimate Coca Cola’s EPS for 2023 . c) Assume that from 2023 onwards, the Total Payout Rate for Coca Cola stays constant at the level you computed in part (a), and its earnings grow at the rate of 3% a year. If the equity cost of capital is 8%, what should be the price per share of Coca Cola at the beginning of 2023?

For this problem, use the following Cash Flow Statement for Coca Cola for year 2022. All numbers are in millions .a) What was the Total Payout Rate for Coca Cola in 2022? b) Coca Cola had 4,3 billion shares outstanding at the end of 2022. What is Coca Cola’s EPS? Assuming Coca Cola’s EPS in 2023 will be 5% higher, estimate Coca Cola’s EPS for 2023 . c) Assume that from 2023 onwards, the Total Payout Rate for Coca Cola stays constant at the level you computed in part (a), and its earnings grow at the rate of 3% a year. If the equity cost of capital is 8%, what should be the price per share of Coca Cola at the beginning of 2023?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For this problem, use the following Cash Flow Statement for Coca Cola for year 2022.

All numbers are in millions

.a) What was the Total Payout Rate for Coca Cola in 2022?

b) Coca Cola had 4,3 billion shares outstanding at the end of 2022. What is Coca Cola’s EPS? Assuming Coca Cola’s EPS in 2023 will be 5% higher, estimate Coca Cola’s EPS for 2023

. c) Assume that from 2023 onwards, the Total Payout Rate for Coca Cola stays constant at the level you computed in part (a), and its earnings grow at the rate of 3% a year. If the equity cost of capital is 8%, what should be the price per share of Coca Cola at the beginning of 2023?

Year Ended December 31, Operating Activities Consolidated net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss-net of dividends Foreign currency adjustments Significant (gains) losses - net Other operating charges Other items THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Net change in operating assets and liabilities Net Cash Provided by Operating Activities Investing Activities Purchases of investments Proceeds from disposals of investments Acquisitions of businesses, equity method investments and nonmarketable securities Proceeds from disposals of businesses, equity method investments and nonmarketable securities Purchases of property, plant and equipment Proceeds from disposals of property, plant and equipment Collateral (paid) received associated with hedging activities - net Other investing activities Net Cash Provided by (Used in) Investing Activities Financing Activities Issuances of debt Payments of debt Issuances of stock Purchases of stock for treasury Dividends Other financing activities Net Cash Provided by (used in) Financing Activities Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the year Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Year Less: Restricted cash and restricted cash equivalents at end of year Cash and Cash Equivalents at End of Year $ $ 2022 9,571 $ 1,260 356 (122) (838) 203 (129) 1,086 236 (605) 11,018 (3,751) 4,771 (73) 458 (1,484) 75 (1,465) 706 (763) 3,972 (4,930) 837 (1,418) (7,616) (1,095) (10,250) (205) (200) 10,025 9,825 306 9,519 $
Transcribed Image Text:Year Ended December 31, Operating Activities Consolidated net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss-net of dividends Foreign currency adjustments Significant (gains) losses - net Other operating charges Other items THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Net change in operating assets and liabilities Net Cash Provided by Operating Activities Investing Activities Purchases of investments Proceeds from disposals of investments Acquisitions of businesses, equity method investments and nonmarketable securities Proceeds from disposals of businesses, equity method investments and nonmarketable securities Purchases of property, plant and equipment Proceeds from disposals of property, plant and equipment Collateral (paid) received associated with hedging activities - net Other investing activities Net Cash Provided by (Used in) Investing Activities Financing Activities Issuances of debt Payments of debt Issuances of stock Purchases of stock for treasury Dividends Other financing activities Net Cash Provided by (used in) Financing Activities Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the year Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Year Less: Restricted cash and restricted cash equivalents at end of year Cash and Cash Equivalents at End of Year $ $ 2022 9,571 $ 1,260 356 (122) (838) 203 (129) 1,086 236 (605) 11,018 (3,751) 4,771 (73) 458 (1,484) 75 (1,465) 706 (763) 3,972 (4,930) 837 (1,418) (7,616) (1,095) (10,250) (205) (200) 10,025 9,825 306 9,519 $
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