PepsiCo's financial statements are presented in Appendix A. Coca-Cola's financial statements are presented in Appendix B.
Instructions
(a) Based on the information contained in these financial statements, compute the 2008 book value per share for each company. (Hint: Use the value reported for "common shareholders' equity" as the numerator for PepsiCo.)
(b) Compare the market value per share for each company to the book value per share at year-end 2008. Assume that the market value of Coca-Cola's stock was $45.27 at year-end 2008.
(c) Why are book value and market value per share different?
(d) Compute earnings per share and return on common stockholders' equity for both companiesfor the year ending in January 2008. Assume PepsiCo's weighted-average shares were 1,575 million and Coca-Cola's weighted-average shares were 2,462 million. Can these measures be used to compare the profitability of the two companies? Why or why not?
(e) What was the total amount of dividends paid by each company in 2008?