Question: Computing Return on Equity Starbucks reports net income for 2015 of $2,757.4 million. Its stockholders equity is $5,272 million and $5,818 million for 2014 and

Computing Return on Equity Starbucks reports net income for 2015 of $2,757.4 million. Its stockholders’ equity is $5,272 million and $5,818 million for 2014 and 2015, respectively.

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?

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