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callifornia pizza kitchen Essay

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Report on Case analysis of California Pizza Kitchen Course (506): Cases in Financial Decision Making SUBMITTED TO: Dr. M. Sadiqul Islam Professor Department of Finance University of Dhaka SUBMITTED BY: Group 21 MBA 16th Batch Department of Finance University of Dhaka Date of Submission April 08, 2015 Group No: 21 Serial Name BBA ID MBA ID 1 Farhana Bondhon 16-004 16-615 2 Farha Farzana 16-006 16- 727 3 Marufa Akhter 16-132 16- 657 Letter of Transmittal April 08, 2015 Dr. M. Sadiqul Islam Professor Department of Finance University of Dhaka Subject: Submission of Report. Sir, With pleasure, we present to you the report on “case analysis of California Pizza Kitchen” for the fulfillment of the course “Cases in Financial …show more content…

The company had 213 locations in 28 states and 6 foreign countries after the 2nd quarter of 2007. It offers pizzas, pastas, soups, sandwiches, appetizers and desserts. The company also serves travelers on the go and sports fans by operating locations at airports, sports stadiums, and universities in the USA as well as sells its products through grocery stores. In addition, it provides catering for events by offering customized menus as well as enables ordering gift cards online. Further, CPK provides franchising opportunities internationally to companies that own full-service restaurant chains. The case is intended to provide an introduction to the Modigliani and Miller capital structure irrelevance propositions and the concept of debt tax shields, effect of distress cost. The case serves to motivate some important objectives. Those are as follows: 1. Introduce the Modigliani-Miller intuition of capital structure irrelevance 2. Establish how the cost of equity is affected by capital structure decisions by defining financial risk and introducing the levered beta CAPM equation 3. Discuss interest tax deductibility and the valuation tax shields 4. Explore the importance of debt capacity in a growing business California Pizza Kitchen has been operating since 1985 predominantly in California. As of June 2007, they had 213 retail locations in the US and abroad. In the second quarter of 2007, revenue increased 16% while

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