Financial Assessment of Starbucks
Executive Summary
In this report, two different parts will be covered:
On the first part, we are considering of using Dividend Discount Model (DDM) is a main method to determine the share price of Starbucks. Our model is developed by using the past figure which is the financial statement of the third quarter 2012. Then, after arriving at the share price of $45.6, our recommendation is wait and not to buy it now. We also include in the report the comparison of our price and other analyst’s price. Several assumptions have been made for our model as well.
An ethics report has also been compiled in relation to two scenarios. In each scenario the team has evaluated the behavior and determined whether it was ethical and in compliance with the CFA Guidelines. In Scenario One an analyst is pressured into making a hasty forecast report. This is unethical under the CFA Best Practice Guidelines Governing Analysts. The forecast reports were under researched, incomplete, and cause any recommendations made from the reports to be an unfair representation of the firm and could negatively influence investors. In Scenario Two, the team evaluated the actions of Mr Hintz in a conflict of interest case. While Mr Hintz was trying to act ethically he did not meet the standards set by the CFA Professional Code of Conduct. The team then assessed possible alternatives available to Mr Hintz for selling his stocks and policies which employers could put in place to prevent unethical situations like this occurring.
Part I: Equity Valuation
Company Overview
This report provides an evaluation of equity of Starbucks Corporation, a biggest coffee house chain in the world, which has 19,972 stores across 60 countries (September, 2012). Main operating activities of Starbucks are selling drip brewed coffee, espresso-based hot drinks, teas, coffee beans, salads, hot and cold sandwiches and panini, sweet pastries, snacks, and items such as mugs and tumblers. In 26 June 1992, Starbuck launched
In this report, two different parts will be covered:
On the first part, we are considering of using Dividend Discount Model (DDM) is a main method to determine the share price of Starbucks. Our model is developed by using the past figure which is the financial statement of the third quarter 2012. Then, after arriving at the share price of $45.6, our recommendation is wait and not to buy it now. We also include in the report the comparison of our price and other analyst’s price. Several assumptions have been made for our model as well.
An ethics report has also been compiled in relation to two scenarios. In each scenario the team has evaluated the behavior and determined whether it was ethical and in compliance with the CFA Guidelines. In Scenario One an analyst is pressured into making a hasty forecast report. This is unethical under the CFA Best Practice Guidelines Governing Analysts. The forecast reports were under researched, incomplete, and cause any recommendations made from the reports to be an unfair representation of the firm and could negatively influence investors. In Scenario Two, the team evaluated the actions of Mr Hintz in a conflict of interest case. While Mr Hintz was trying to act ethically he did not meet the standards set by the CFA Professional Code of Conduct. The team then assessed possible alternatives available to Mr Hintz for selling his stocks and policies which employers could put in place to prevent unethical situations like this occurring.
Part I: Equity Valuation
Company Overview
This report provides an evaluation of equity of Starbucks Corporation, a biggest coffee house chain in the world, which has 19,972 stores across 60 countries (September, 2012). Main operating activities of Starbucks are selling drip brewed coffee, espresso-based hot drinks, teas, coffee beans, salads, hot and cold sandwiches and panini, sweet pastries, snacks, and items such as mugs and tumblers. In 26 June 1992, Starbuck launched