Dunkin’ Brands: Still a Sweet Treat?


A publicly traded company, Dunkin’ Brands, consists of two quick service restaurant segments, Dunkin’ (formerly Dunkin’ Donuts) and Baskin-Robbins. Investors became aware of Dunkin’ Donuts in the late 1980s when Peter Lynch wrote in his book, One up on Wall Street (1989), that he bought the company’s common stock because “[he] loved the coffee.” Now, over thirty years later, this case asks if loving the coffee is still a good reason to invest in the company’s common equity. Through examination of the firm’s financial statement, students can evaluate the company’s financial leverage and discuss the risks associated with its use of debt. The case provides the opportunity to use both relative and discounted cash flow measures to determine its intrinsic value. Students must then decide if they would recommend investing in Dunkin’ Brands.

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