Estimate Walmarts approximate WACC; use the most recent years debt ratio to find the weights of debt and equity. If Walmart issues preferred stock, for simplicitys sake, ignore it. The cost of debt will be the approximate YTM calculated in Week 5. Use CAPM to calculate Walmarts required rate of return on the stock. The beta was determined in Week 6; use the current 10-year Treasury bonds YTM as the risk-free rate. Using a reliable source, research the current markets expected rate of return (for example, the S&P 500). Be sure to mention all the reference sources.

Week 6 information:

1. The stock has appreciated in the past three years.

2. The stock's highest price was $131.75 on April 16, 2020.

The stock's lowest price was $68.34 on July 10, 2017.

3. Yes, Walmart's Stock pays a dividend.

Explanation:

Answer 1)

Please refer to the attached graph.

Answer 2)

The stock has appreciated in the past three years. On June 12, 2017, the stock price was $79.24 which increased to $121.35 on June 09, 2020. The price of the stock increased by $42.11 in the past three years showing an increase of 53.14%.

Answer 3)

The stock's highest price was $131.75 on April 16, 2020.

The stock's lowest price was $68.34 on July 10, 2017.

Answer 4)

Yes, Walmart's Stock pays a dividend. They pay quarterly dividends. In the year 2017-18, the quarterly dividend was $0.52, in 2018-19 the quarterly dividend was $0.53, in 2019-20 the quarterly dividend was $0.54. It comes to an annual dividend of $2.08 in the year 2017-18, $2.12 in the year 2018-19, and 2.16 in the year 2019-20. In the year 2018-19, the dividend increased by 1.92% and in 2019-20 it increased by 1.89%.

Walmart (WMT) Stock Price 140 120 100 80 Stock Price 60 40 20 2/12/2018 6/12/2017 8/12/2017 10/12/2017 12/12/2017 Date 4/12/2018 6/12/2018 8/12/2018 10/12/2018 12/12/2018 2/12/2019 4/12/2019 6/12/2019 8/12/2019 10/12/2019 12/12/2019 2/12/2020 4/12/2020 Walmart (WMT) Stock Price 140 120 100 80 Stock Price 60 40 20 2/12/2018 6/12/2017 8/12/2017 10/12/2017 12/12/2017 Date 4/12/2018 6/12/2018 8/12/2018 10/12/2018 12/12/2018 2/12/2019 4/12/2019 6/12/2019 8/12/2019 10/12/2019 12/12/2019 2/12/2020 4/12/2020