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dc.contributor.authorWu, María Belén
dc.date.accessioned2017-12-01T23:07:28Z
dc.date.available2017-12-01T23:07:28Z
dc.date.issued2017-06
dc.identifier.urihttp://jhir.library.jhu.edu/handle/1774.2/44595
dc.descriptionThe Studies in Applied Finance series is under the general direction of Prof. Steve H. Hanke, Co-Director of the Johns Hopkins Institute for Applied Economics, Global Health, and Study of Business Enterprise (hanke@jhu.edu) and Dr. Hesam Motlagh (hesamnmotlagh@gmail.com), a Fellow at the Johns Hopkins Institute for Applied Economics, Global Health, and Study of Business Enterprise. This working paper is one in a series on applied financial economics, which focuses on company valuations. The authors are mainly students at the Johns Hopkins University in Baltimore who have conducted their work at the Institute as undergraduate researchers.en_US
dc.description.abstractPepsiCo, Inc. (NYSE: PEP) is a global food and beverages company, most commonly known by its famous brands such as Pepsi-Cola and Frito-Lay. Using historical performance data, we have determined through a Probabilistic Discounted Cash Flow (P-DCF) analysis and Monte Carlo simulations that the company is fundamentally worth $81.25/share. Despite PepsiCo’s cost-cutting efforts and reorientation of business to accommodate the shift of consumer preferences towards healthier and more eco-friendly food, the macroeconomic and political instability in PepsiCo’s emerging market segments, as well as the company’s high debt levels lead us to conclude that PepsiCo does not have the revenue generating potential to justify the current market price. For all the reasons above, we rate PepsiCo a SELL.en_US
dc.language.isoen_USen_US
dc.publisherInstitute for Applied Economics, Global Health, and the Study of Business Enterpriseen_US
dc.relation.ispartofseriesStudies in Applied Finance;19
dc.subjectfinanceen_US
dc.subjectinvestment thesisen_US
dc.subjectPepsiCoen_US
dc.subjectfinancial modelingen_US
dc.subjectdiscounted cash flowen_US
dc.subjectfree cash flowen_US
dc.subjectMonte-Carlo simulationen_US
dc.subjectmanagement compensationen_US
dc.titleInvestment Thesis for PepsiCo, Inc. (NYSE: PEP)en_US
dc.typeWorking Paperen_US


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