calculations based on the following information.
(1-1-10 Data) Lets say McDonald’s needs to raise $1 billion
to expand into Africa. Determine whether McDonald’s should have used all debt,
all stock, or a 50-50 combination of debt and stock to finance this
market-development strategy. Assume a 38 percent tax rate, 5 percent interest
rate, McDonad’s stock price of $50 per share, and an annual dividend of $0.30
per share of common stock. The EBIT range for 2010 is between $6.332 billion
and $9 billion. A total of 1 billion shares of common stock are outstanding.
Develop an EPS/EBIT chart to reflect your analysis.
Discuss in a two page APA formatted paper, how the product
positioning is aligned with McDonald’s corporate strategy. Identify potential
gaps in the product line or weaknesses in positioning. Describe the relevance
of the EPS/EBIT chart and why it is significant with respect to stategy
implementation.
