High School

Starbucks reports net income for 2018 of $4,518.3 million. Its stockholders’ equity is $5,450.1 million for 2017 and $1,169.5 million for 2018.

a. Compute its return on equity (ROE) for 2018.

b. Starbucks repurchased over $7,208.7 million of its common stock in 2018. Did this repurchase increase or decrease Starbucks’ ROE?

c. If Starbucks had not repurchased common stock in 2018, what would the ROE have been?

Answer :

Starbucks reports a net income of $4,518.3 million for the previous year. For the years 2017 and 2018, its stockholders' equity was $5,450.1 million and $1,169.5 million, respectively. a. determine its equity return for 2018. b. In 2018, Starbucks repurchased its common stock for nearly $7,208.7 million. The responses are as follows.:

a. 136.5%

b. ROE usually increases since the repurchase of shares reduces the denominator (avg. stockholders' equity).

c. 65.3%

Starbucks Corporation is a multinational American chain of coffee shops and roasteries with headquarters in Seattle, Washington. It is the world's largest network of coffee cafes. As of November 2021, the company ran 33,833 sites, with 15,444 of those being in the US.

In the United States, Starbucks has around 8,900 company-operated stores, with the remaining ones being licenced.

Starbucks is frequently held responsible for the expansion of the second wave of coffee culture since it provided a wider variety of coffee experiences. Coffee, espresso, caffe latte, full-leaf and loose-leaf teas, juices, Frappuccino drinks, cakes, and snacks are all available at Starbucks.

Additionally offered are pastries, drinks, whole-bean coffee, and micro-ground instant coffee. Only specific seasons or locations have access to certain products. Depending on the country, the majority of locations provide free Wi-Fi internet access.

Learn more about Starbucks here:

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