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Hershey Foods Corporation

Carolyn Wright Hershey Foods Corporation manufactures and distributes a wide variety of chocolate and non-chocolate confectionery products. These products include a variety of candy bars, drink mixes, peanut butter, and baking ingredients. They hold important ethics, high quality, and guarantee customer satisfaction. Hershey also participates in preserving the environment. They work hard to minimize waste, and make wrapping materials easy to dispose of responsibly by indicating on the package the proper way to recycle. They are currently the market leader in their industry. (www.hersheys.com) Hershey is a member of the Food-Confectionery Industry. The growth rate for the last five years for the industry has been 10.7%. The S&P 500 top companies have had a growth rate of 10.3% for the past five years. This means that over the past five years the Food-Confectionery Industry has had a higher growth rate than the top companies in other markets. However, Hershey had a 10.2% growth rate, which in less than top companies, and also has a lower rate than its own industry. This year Hershey Foods has had a negative 8.4% growth rate. (www.yahoo.com) This decline in growth could be due to problems that Hershey had with a new information system that was started in July. The problem with the system was that orders were not being filled due to shipping problems, which left overcrowding in warehouses. This overcrowding has increased inventory costs, and has also left customers unsatisfied. The company has predicted that the problems with the new system are fixed and inventories should be regulated in the coming quarters. There is an anticipated growth rate of 16.1% for Hershey next year. This means that the company is confident that it will grow and not decline despite their current problems with shipping. Beta measures the risk of an asset in comparison to the risk that other relative assets have. Average assets have a beta of 1.0. Betas lower than 1...