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Fundraising for its Charity of the Year, Breast Cancer Campaign broke all previous records, with over ? 1 million being donated. Initiatives included a mobile phone recycling scheme, offering charity Christmas cards and selling a reusable carrier bag. Also with the generous support of our customers, we raised ? 65,000 for the Asian Earthquake Appeal, which was donated to the Shelterbox Trust, and over ? 197,000 for Children in Need. Donations to local and national causes, including through Morrisons Charitable Trust and excluding gifts in kind totaled

678,000. (guthing v lynn (1831) 2b & ad 232) Morrison has a similar problem like Sainsbury. It has no growth in dividends since it is currently making losses. It is therefore not possible for us to estimate the cost of equity capital directly. Again we assume that it faces the same risk like sainsbury and Tesco and should suffer the same equity cost of capital of 13. 7%. Again we assume that the current dividends of ? 97. 8 million will remain constant for ever. With this in mine, we can establish a value for Morrison as follows.

V2006 = 97,800,000/. 137 = ? 713,868,613,14. The company proposed a dividend per share of 3,075p. this implies that the total number of shares outstanding is given by the total dividend divided by the dividend per share as follows: 97,800,000/0. 03075 = 3,180,487,805. Therefore the value per share is given by ? 713,868,613. 14. /3180487805 = 22. 4p However, the market values the stock at 329. 25p. This is another case of an overvaluation because the value obtained here is only 22. 4p. This also corresponds to a sell decision for Morrison Plc.

Marks and Spencer

Marks and Spencer Group plc is the holding company of the Marks & Spencer group of companies. The Company is a retailer of clothing, food and home products. The Company trades in wholly owned stores in the Republic of Ireland and Hong Kong, as well as in worldwide franchise stores. It had 144 Simply Food stores across the United Kingdom. International business comprises wholly owned stores, in the Republic of Ireland and Hong Kong, and 198 M&S branded franchise storesworldwide, including 22 stores opened during the fiscal year ended April 1, 2006.

On April 28, 2006, the Company completed the sale of Kings Super Markets, its wholly owned supermarket chain in the United States. The company proves to be the most profitable earning a return on equity of 45% in 2006. One can also observe improvements in the figures from 2005 except the figure for return on investment which witnessed a decrease from 12% in 2005 to 10% in 2006. However, the company is more profitable than the rest of the companies under study.

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