In: Accounting
Coca-Cola Amatil (CCA) is one of the largest manufacturers of
soft drinks in the Asia-Pacific
region and operates in six countries – Australia, New Zealand,
Indonesia, Papua New Guinea,
Fiji and Samoa. CCA is also listed on the Australian Stock Exchange
since 1970. Your task is
to download CCA’s 2017 Annual Report and answer the following
questions.
1. What is the average annual dividend growth rate for CCA between
2013 and 2017?
Hint-use information provided on page 135.
2. Do you think CCA will maintain this recent growth rate forever?
Justify your answer
and if you disagree then also suggest a new dividend growth rate
range. Hint-start by
reading pages 8-9.
3. Suppose the annual dividend growth rate is 5 percent, which will
continue into the
foreseeable future. What is the intrinsic value of CCA’s share at
31st December 2018,
if you require an annual return of 10 percent?
4. What was CCA’s share price on 31st December 2018?
5. Should you invest in CCA’s shares based on 3 and 4 above? Why or
why not?