• 1. Discuss Pros and Cons of an obesity campaign for a soft drink company (general issues of perception and purpose) – develop business case and social case
2. Discuss specific challenges for Pepsi
a. Estimate a suggested discount rate to compute NPV and PI for an obesity campaign using actual company WACC (see ValuePro) – would you use corporate level WACC – why/why not?
b. Assess the company’s ability to invest in an obesity campaign looking at beta, debt/equity ratio, and cash flows of company – how would the company raise capital; what would be the mix of debt/equity?
c. Review changes in stock prices over the past 18 months since May 2013. Evaluate risk and return for an investor in Peps- has it been good or bad? Why?