FIN501 - Strategic Corporate Finance - Mod 1 SLP - Essay Example

Finance Module SLP of the of the Finance Module SLP Brief of the Company I have chosen the Coca Cola Company for my finance SLP. The main business of the Coca Cola Company is to provide beverages to quench the thirst of people the world over. Headquartered in Atlanta, the company operates in 200 countries, has over 139,000 employees and 2,500 products. The drink that started it all was the ever popular Coca Cola, which was originally created in Atlanta, USA by Dr. John Pemberton in 1886. It was named Coca Cola by his accountant, Frank Robinson.

The rights to its ownership were purchased by Asa Chandler, its first President, whose marketing genius led to it being popularized all over the United States. As Coke celebrates 125 years of its history, the brand is now the most recognized in the world (The Coca Cola Website, 2011). The shares of Coca Cola are sold on the NYSE under the symbol KO. It has never failed to announce a dividend in the last 49 years. The stock price as of 13 January 2012 is $66.99 and during the past year its stock price has varied from a low of $61.

29 to a high of $71.77-so we can say that its price has been quite consistent. The Coca Cola Company earned revenues of $46 billion in 2011, with a net income of $12.69 billion. It is part of the soft drinks or beverage industry, with its main competitors being Pepsi, the Nestle Group and Dr. Pepper or the Snapple Group (Yahoo Finance, 2011). Why I Chose This Company I think that Coca Cola is one of the world’s most successful brands, and is a prime example of how taste can transcend all boundaries.

Not only the beverage itself but even the shape of the bottle and the distinctive logo make it easily recognizable the world over. With over 2500 products sold in over 200 countries, it is a phenomenal American success story. Not many companies have a record of announcing dividends for 49 years without a break, which is a remarkable feat. About IPOs Coca Cola is definitely one of the best stocks to own today. Yet Benjamin Graham, the father of value investing recommended to his followers to stay clear of all IPOs.

The reason is that the initial founders may be looking to recap on their original investment, or the company may not live up to its promises or the media hype. For example, a share of Coca Cola Corp. purchased in 1919 at the IPO offering of $40 crashed to $19 in 1920. Yet it has picked up to $60 and above today. It is estimated that with all dividends reinvested following the original investment, a single share would be worth over $5 million today. What I have learned from this module is that if we are lucky enough to buy into a promising stock, and hold on to it for a while, say 20 to 30 years, it could be a life changing experience for investors-such as Wal-mart, Google, Home Depot etc.

References The Coca-Cola Website (2011).The Chronicle of Coca-Cola. Accessed on 17 Jan 2012 at http://www.thecoca-colacompany.com/heritage/chronicle_birth_refreshing_idea.html The Yahoo Finance Website (2012). About KO: Technical Analysis. Accessed on 17 Jan 2012 at http://finance.yahoo.com/q/ta?s=KO+Basic+Tech.+Analysis