Memorandum Coca-Cola Enterprises, Inc. to, Ceo of Coca-Cola Enterprises, Inc. from Financial Analyst Date 19-7-2015 Subject: Evaluation of the Capital Structure of the Firm. Sir, We Have Done an Analysis of the Firm’s

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MEMORANDUM COCA-COLA ENTERPRISES, INC. To, CEO of COCA-COLA ENTERPRISES, INC. From financial analyst Date 19-7-2015 Subject: Evaluation of the capital structure of the firm. Sir, We have done an analysis of the firm’s operating income and cash flows and we consider how much debt it can afford to carry on the basis of the cash flows. We apply the operating income approach to analyses whether the firm can issue the debt of 1 billion or not. Maximum probability of default is 5% and from our calculation based on the t-statistic the probability that Coca-Cola will be unable to meet its debt payments in the next year is 0.00183% which is far less than the maximum probability of default that is 5% it means the company can easily take the debt and the maximum debt the company can take if the rate of interest remain constant is 3053.63 million. We have taken the assumptions what happened if the interest rate increases and if we increase the probability of default what is the amount of max debt a company can take in future the analysis is given in the table and show a general trend line with the help of a graph. There are some assumptions we have taken they are attached to this memo . Thank you sir for giving us opportunity to work with you, the staff of your company is very cooperative we are very thankful to them also. You can call us if there is any query regarding the calculations and any other thing. Regards, FINANCIAL ANALYST Assumptions • we have taken the probability of default as 5% • we have taken the sinking fund as 10% • the interest rate we have taken by adding the given interest rates on different debt instruments that is 4.5% • the value of lease payment are taken by adding both the amount of operating lease and capital lease from the detailed description of lease segment • in the credit facility section the amount is

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