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Essay / Research Paper Abstract
This 10 page paper is a financial analysis of Cadbury PLC. The first part of the paper assesses the cost of capital, the second part of the paper looks at the profitability and the return for shareholders. The bibliography cites 10 sources.
Page Count:
10 pages (~225 words per page)
File: TS14_TEcad2008.rtf
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Unformatted sample text from the term paper:
New York and the London stock market. Well known as a confectionary company the company has developed a global presence and is a dominant influence within the confectionary and chocolate
market. However, in isolation the firm, with its brand names and perceived value is an attractive takeover target for other firm, so the important to creating value for the shareholders
as a relatively newly demerged company. To assess performance an important consideration is the cost of capital for the firm. In
order to calculate the overall cost of capital it needs to be appreciated that there are two types of capital, equity and debt. Equity is the capital within the company
that belongs to the shareholders and debts the funding that has been provided by way of loans. It is worth noting that preference shares will usually be counted as a
debt as these have different terms and conditions. In calculating the average figure for each of the types of capital these may then be used to calculate the weighted average
cost of capital (WACC). All figures quoted are in ?millions unless otherwise specified. In looking at Cadburys latest set of accounts1
tell use that there is a total of ?3,522 in equity. There are several ways of calculating the cost of equity. The cost of equity can be calculated in several
ways. The most popular is the Capital Assets Pricing Model (CAPM), also known as the SML model. The risk of any investment
is usually measured in terms of the beta, the greater the beta the higher the potential risk and also the potential reward (Goetzmann, 1997). This model demonstrates that the higher
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