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Starbucks reports net income for 2015 of $2,757.4 million. Its stockholders' equity is $5,272 million and $5,818 million for 2014 and 2015, respectively. a. Compute its return on equity for

Starbucks reports net income for 2015 of $2,757.4 million. Its stockholders' equity is $5,272 million and $5,818 million for 2014 and 2015, respectively.


a. Compute its return on equity for 2015.
Round answer to one decimal place (ex: 0.2345 = 23.5%)
Answer%


b. Starbucks repurchased over $1.4 billion of its common stock in 2015. Did this repurchase increase or decrease Starbucks’ ROE?

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

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

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

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


c. If Starbucks had not repurchased common stock in 2015, what would ROE have been?
Note: Round answer to one decimal place (example: 20.6%).

Apr 18 2021 View more View Less

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