Company: WALMART

1. Cost of Common Equity:

• CAPM Model:
  • This section should include your companys Beta and the resulting cost of common equity using the CAPM model.
  • Calculate the Beta for your company. Use the excel file Excel Template to Calculate Beta Apply CAPM to help you with calculating Beta.
  • Compare the Beta of your firm to the Beta of two other firms in the same industry. (You can use the Beta from Yahoo finance for the Beta of the comparable firms.)
  • Provide a discussion of the riskiness of your companys stock in terms of Beta.

• Discounted Cash Flow (DCF) Model:
  • How much and how often does the firm pay common stock dividends? What is the dividend payout ratio? Do the comparable firms pay dividends and what is their dividend payout ratio?
  • Has the company significantly changed its dividend payments over the past 5 years? If so, what factors could possible explain the shift? You may consult the firms annual report to see if there is any discussion and/or explanation for these changes.
  • Use the DCF model to calculate the Cost of Equity. (You can use the analyst estimate from Yahoo Finance for the growth rate.)