Table 28.8 gives abbreviated balance sheets and income statements for Walmart. At the end of fiscal 2017,

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Table 28.8 gives abbreviated balance sheets and income statements for Walmart. At the end of fiscal 2017, Walmart had 2,960 million shares outstanding with a share price of $106. The company?s weighted-average cost of capital was about 5%. Assume the marginal corporate tax rate was 35%. Calculate:

a. Market value added.

b. Market-to-book ratio.

c. Economic value added.

d. Return on start-of-the-year capital.

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Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...
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Principles of Corporate Finance

ISBN: 978-1260013900

13th edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen

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