*Rewards program: 15,607 US stores averaging 500 customers per day. $1 per card, $400 dollars per store for software needed, $20 per month for software usage. *Product placement: $20,000 for a visual placement, $40,000 for a brand name mention, $60,000 for an action to use the product in a scene. *Distribution center: 680,000 square feet in Raleigh, NC at 104 dollars per square feet + estimated costs for equipment. EPS-EBIT Analysis Narrative The EPS/EBIT analysis revealed a minuscule difference between financing through equity versus financing through debt. We looked towards the economy and kept our current shareholders in mind when choosing between debt and equity financing. We to finance through debt because interest rates are so low right now making financing through debt pretty cheap. Additionally, by financing through debt, Starbucks will be able to deduct the interest for taxes, making the cost of debt even lower. Financing through common stock would end up costing more in the long run because returns to equity are continually offered through perpetuity. We also did not want to dilute our current stockholder’s percentage ownership of Starbucks. EPS/EBIT Analysis: Tables and Graphs
*Rewards program: 15,607 US stores averaging 500 customers per day. $1 per card, $400 dollars per store for software needed, $20 per month for software usage. *Product placement: $20,000 for a visual placement, $40,000 for a brand name mention, $60,000 for an action to use the product in a scene. *Distribution center: 680,000 square feet in Raleigh, NC at 104 dollars per square feet + estimated costs for equipment. EPS-EBIT Analysis Narrative The EPS/EBIT analysis revealed a minuscule difference between financing through equity versus financing through debt. We looked towards the economy and kept our current shareholders in mind when choosing between debt and equity financing. We to finance through debt because interest rates are so low right now making financing through debt pretty cheap. Additionally, by financing through debt, Starbucks will be able to deduct the interest for taxes, making the cost of debt even lower. Financing through common stock would end up costing more in the long run because returns to equity are continually offered through perpetuity. We also did not want to dilute our current stockholder’s percentage ownership of Starbucks. EPS/EBIT Analysis: Tables and Graphs
StarbucksProject.docx