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McDonalds Corporation

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Determine how global competition impacts your organization.
· Should the organization/industry continue, expand, or reduce current operations in order to maximize profits? Explain your reasoning.
· If your answer is to expand: Should the organization/industry invest in new plants, equipment, or technologies? Should the organization/industry consider a merger with another organization? Explain your reasoning and explain global competition implications.
· If your answer is to reduce: Should the organization/industry reduce production or shutdown their operations? Explain your reasoning.

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mcdonalds coorporation please help me to answer following questions

Determine how global competition impacts your organization.
? Should the organization/industry continue, expand, or reduce current operations in order to maximize profits? Explain your reasoning.
Currently, the market for food products including those of McDonald's is saturated. On a simplistic level a reduction in prices may lead to increased profits, however, the large competitors of McDonald's will also follow up with matching price reductions, a situation similar to normal oligopoly. This will result in reduction of profits.
What the companies are doing and should continue to do is to offer newer products with different features. The purpose is to address new needs of the customers. To meet customer preferences and remain competitive, the retailers continue to introduce new ...

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Cost of equity of Nike, Sony Corporation, and McDonald's Corporation

The cost of equity (discount rate) can also be determined by using the Capital Asset Pricing Model (CAPM). Calculating the cost of equity using the CAPM model is often more difficult than using the dividend discount model. The companies' financial statements do not show the cost of equity.

The following table shows necessary (hypothetical) information to calculate the cost of equity by using the CAPM model:

Company
Listing
RRF
RM
ßj

Nike Inc.
NYSE: NKE
0.40%
6.50%
0.90
Sony Corporation
NYSE: SNE
0.40%
9.50%
1.60
McDonald's Corporation
NYSE: MCD
0.40%
8.50%
0.40

E(rj)= RRF + βj (RM - RRF)

E(rj) - The cost of equity

RRF - Risk-free rate of return

ßj - Beta of the security

RM - Return on market portfolio

Based on the above information, which company has higher cost of equity? Why? Briefly explain your reasoning.
The CAPM model shows that risk-free rate of return, return on market portfolio, and company beta determine the cost of equity.

What type of factors influence company beta? Briefly describe the factors that influence company beta. For example, higher financial leverage (total liabilities to total assets ratio) can lead to higher company beta.

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