Question 1) A. Calculate Walmart’s cost of equity using both the DDM & CAPM methods. Organize your calculations in a cle
Posted: Wed May 04, 2022 7:07 am
Question 1)
A. Calculate Walmart’s cost of equity using both the DDM &
CAPM methods. Organize your calculations in a clear and concise
manner and state any assumptions.
B. Determine Walmart’s WACC. Organize your calculations in a
clear and concise manner and state any assumptions.
EXHIBIT 5: AVERAGE ANNUAL RETURNS IN U.S. CAPITAL MARKETS OVER THE PERIOD 1928-2018 S&P 500 (Includes 3-Month Return on 10- Year Treasury Bond Dividends) Treasury Bill Arithmetic Average 1928-2018 11.36% 3.43% 5.10% 1969-2018 11.10% 4.76% 7.10% 2009-2018 13.49% 0.49% 2.28% Geometric Average 1928-2018 9.49% 3.38% 4.83% 1969-2018 9.73% 4.71% 6.69% 2009-2018 12.98% 0.49% 1.97%
EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 Stock Total Year EPS DPS Price Return 2007 2.71 0.67 36.30 10.07% 2008 3.12 0.88 37.98 7.04% 2009 3.39 0.95 38.36 3.52% 2010 3.71 1.09 43.04 15.03% 2011 4.47 1.21 42.33 1.15% 2012 4.52 1.46 49.43 20.22% 2013 5.02 1.59 60.68 25.97% 2014 4.88 1.88 65.61 11.23% 2015 5.06 1.92 75.56 18.10% 2016 4.58 1.96 61.39 -16.17% 2017 4.39 2.00 67.54 13.28% 2018 3.27 2.04 87.92 33.20% 2019 2.28 2.08 96.08 11.64%
EXHIBIT 3: WALMART INC., CONSOLIDATED INCOME STATEMENT AS OF JANUARY 31 ($ MILLIONS) 2019 2018 Revenue 514,405 500,343 Costs and Expenses: Cost of Goods Sold 385,301 373,396 107,147 106,510 Operating, Selling, General & Administrative Expenses Total Costs and Expenses 492,448 479,906 Operating Income 21,957 20,437 Interest Expense, Net (2,129) (2,178) Other Items (8,368) (3,136) Income Before Income Taxes 11,460 15,123 Income Tax Expense 4,281 4,600 Net Income 7,179 10,523 (509) (661) Net Income Attrributable to Non-Controlling Interests Net Income Attributable to Walmart Shareholders 6670 9862
A. Calculate Walmart’s cost of equity using both the DDM &
CAPM methods. Organize your calculations in a clear and concise
manner and state any assumptions.
B. Determine Walmart’s WACC. Organize your calculations in a
clear and concise manner and state any assumptions.
- Question 1 A Calculate Walmart S Cost Of Equity Using Both The Ddm Capm Methods Organize Your Calculations In A Cle 1 (48.95 KiB) Viewed 18 times
- Question 1 A Calculate Walmart S Cost Of Equity Using Both The Ddm Capm Methods Organize Your Calculations In A Cle 2 (55.23 KiB) Viewed 18 times
EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 Stock Total Year EPS DPS Price Return 2007 2.71 0.67 36.30 10.07% 2008 3.12 0.88 37.98 7.04% 2009 3.39 0.95 38.36 3.52% 2010 3.71 1.09 43.04 15.03% 2011 4.47 1.21 42.33 1.15% 2012 4.52 1.46 49.43 20.22% 2013 5.02 1.59 60.68 25.97% 2014 4.88 1.88 65.61 11.23% 2015 5.06 1.92 75.56 18.10% 2016 4.58 1.96 61.39 -16.17% 2017 4.39 2.00 67.54 13.28% 2018 3.27 2.04 87.92 33.20% 2019 2.28 2.08 96.08 11.64%
EXHIBIT 3: WALMART INC., CONSOLIDATED INCOME STATEMENT AS OF JANUARY 31 ($ MILLIONS) 2019 2018 Revenue 514,405 500,343 Costs and Expenses: Cost of Goods Sold 385,301 373,396 107,147 106,510 Operating, Selling, General & Administrative Expenses Total Costs and Expenses 492,448 479,906 Operating Income 21,957 20,437 Interest Expense, Net (2,129) (2,178) Other Items (8,368) (3,136) Income Before Income Taxes 11,460 15,123 Income Tax Expense 4,281 4,600 Net Income 7,179 10,523 (509) (661) Net Income Attrributable to Non-Controlling Interests Net Income Attributable to Walmart Shareholders 6670 9862