Staples Stock Valuation

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Stock Valuation: Staples Inc. Principles of Finance Consuelo Vega Excelsior College Staples Inc. (NASDAQ:SPLS) is the world's largest office products company, generating $24.3 billion in sales in 2009, up 5.2% from 2008 (Staples Inc., 2015). The company offers a range of office products, furniture, computers, and other supplies through more than 2,150 Staples stores in the Americas, Europe, Asia, and Australia. Their common stock is traded on the NASDAQ Global Select Market under the symbol "SPLS". In addition to its retail outlets, Staples sells office products via the Internet and through its catalog and direct sales operations, including subsidiary Quill Corp (VAULT, 2015). Founded by Tom Stemberg, Staples opened the world's…show more content…
The acquisition has also helped the company's performance in the sluggish economy as it put less pressure on the company's North American retail business. While Staples is the overall leader, it has embarked on several initiatives to extend its lead. For its physical retail locations, the company has significantly remodeled older stores while introducing smaller store formats in less-populated areas. To increase its margin, Staples has increased the mix of private label offerings (i.e., Staples brand products) and emphasized the purchase of products directly from manufacturers instead of distributors. Not only is the company ahead of its closest competitors in terms of revenue, Office Depot (ODP) had revenue of $12.1 billion (a 16% decline) and OfficeMax (OMX) had sales of $7.2 billion (down 12.8%), but it is the only one to have positive profits in 2009. Staples profits were $739…show more content…
The following ratios help determine the financial health of Staples Inc.: Bond Value: = C x [1 – 1/ (1 + r) ^1] /r + F / (1 + r) ^1 = $80 x (1-1/1.10^6)/.10 + 1,000 /1.10^6 = $80 x 4.3553 + 1,000/1.10^6 = $912.89 The Fisher Effect: 1 + R = (1 + r) X (1 + h) R = r + h + r x h R = r + h = 1.10 x 1.08 = 1.1880 Required Return: R = D1 / P0 + g = $1/20 +
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