Pepsi CoSold Its Cola Syrup to Japan and Agreed to Buy

question 142

Essay

Pepsi Co.sold its cola syrup to Japan and agreed to buy Japanese Sake at a certain rate for sale in the United States for the next 5 years.What kind of a countertrade did both the parties indulge in?

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Definitions:

Earnings Retention Ratio

The earnings retention ratio, also known as the plowback ratio, measures the percentage of net income that is retained in the company rather than being paid out as dividends.

Market Capitalization Rate

Market capitalization rate, or "cap rate", is used in evaluating and comparing the expected returns on investments in the equity market, reflecting the cost of capital for a company.

P/E Ratio

The price-to-earnings ratio, a valuation metric calculated by dividing the current market price of a stock by its earnings per share.

Dividend Plowback Ratio

The portion of a company's earnings that is not distributed as dividends but is reinvested in the business, also known as the retention rate.