Computing Return on Equity
Starbucks reports net income for 2015 of $2, 757.4 million. Its stakeholders' equity is $5,272 million and $5,818 million for 2014 and 2015, respectfully.
a) Compute its return on equity for 2015.
b) Starbucks, repurchased over $1.4 billion of its common stock in 2015. How did this repurchase affect Starbucks' ROE?
c) Why do you think a company like Starbucks repurchases its own stock?