Pepsi In Cuba

Essay specific features

 

Issue:

Business

 

Written by:

Rayna S

 

Date added:

June 16, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 724

 

Was viewed:

8821 times

 

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Essay content:

We came up with 9.83% of WACC. Next, we calculated Deltex free cash flow and terminal value and then converted them into US dollar value. Now with WACC and total cash flow, we had NPV of the company. So we deducted current debt from NPV and came up with the value of US$360M investment equal to 59.99% of Deltex equity...
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So the proposal to buy 30% of Deltex with US$360M is too expensive to PepsiCo and not attractive to PepsiCo. If we look at the sensitivity analysis, we find as WACC increases, the percentage of US$360M investment in Deltex also increases. When WACC is 5.8%, the percentage of US$360M investment in Deltex is equal to 30% equity of Deltex...
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