For questions 1 and 2 below, computations should be made for the following three companies; Proctor & Gamble Co. (PG), PepsiCo, Inc. (PEP), and Kraft Foods Inc. (KFT). 1. For the three companies...

Question 1)
Procter and Gamble is an American conglomerate engaged in the manufacture and marketing of
a large number of consumer goods. The company has a reported net profit of US$ 11.69 billion
in 2010. In regard to the decision making on the distribution of common stock, the company has
an average rate of return on the common stock to a percentage around 8%. There has been a
eported 64% increase in the rate of dividends paid to the common stock holders. The total
dividend distributed in the year ending June 30, 2006 was US$ 3555 million which reached to
the figure of US$ 5534 in the year ending June 30, 2011. Also the company declared an increase
of 7.05% on April 14, 2012 in the company’s quarterly dividend.
PepsiCo Inc. is a transnational company based in the New York state of America which is
engaged in the manufacture, distribution and marketing of snack foods, beverages and other
similar products. In 2010, the company recorded a reported a revenue of US$ 57.754 billion and
net income of US$ 6.44 billion. The company has services which allow direct deposit of
dividend into stock holder’s bank account by simply completing the direct deposition
authorization form. The company paid a dividend of $0.515 on quarterly basis on 30
th
March
2012. Recently, on 2.5.12, the company announced its 40
th
consecutive increase in the rate of
annual dividend, which was increased to $2.15 from $2.06, a remarkable 4% increase in the rate
of dividend.
Kraft Foods Inc. is an American worldwide confectionary chain and a food and beverage
multinational. Listen on the New York Stock exchange, the company has reported net income
figure of US$ 4.124 billion as on 2010. Talking about the dividend distribution decisions of the
company, KFT pays regular quarterly dividends on their class a common stock. Dividends are
declared by the Board of Directors and are solely decided and can be changed as per their
meeting schedules. In 2012, KFT paid an annual dividend amount of $0.28 on the common
stock as on the financial year ending of 30.3.12.
References:
1. http:
www.stock-analysis-on.net/NYSE/Company/Procter-Gamble-Co/Financial-
Statement/Income-Statement
2. http:
www.abiederman.com/marketing/pepsico-dividend-rose-4.html
3. http:
phx.corporate-ir.net/phoenix.zhtml?c=129070&p=irol-dividends
http:
www.stock-analysis-on.net/NYSE/Company/Procter-Gamble-Co/Financial-Statement/Income-Statement
http:
www.stock-analysis-on.net/NYSE/Company/Procter-Gamble-Co/Financial-Statement/Income-Statement
http:
www.abiederman.com/marketing/pepsico-dividend-rose-4.html
http:
phx.corporate-ir.net/phoenix.zhtml?c=129070&p=irol-dividends
Question 2)
Proctor & Gamble Co.
Net investing activities consumed $597 million of cash in 2010 and $2.4 billion in 2009 mainly
due to capital spending and acquisitions, partially offset by proceeds from asset sales, including
$3.0 billion in cash received from the sale of our global pharmaceuticals business in 2010.
Acquisitions
Acquisitions used $425 million of cash in 2010 primarily for the acquisition of Natura. In 2009,
acquisitions used $368 million of cash mainly for the acquisition of Nioxin.
Asset Sales
Proceeds from asset sales contributed $3.1 billion to cash in 2010 mainly due to the sale...