Estimate Walmarts weighted average cost of capital (WACC). State any assumptions and your methodology in a clear and concise manner. (25 pts)

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EXHIBIT 2: WALMART INC., CONSOLIDATED BALANCE SHEET AS OF JANUARY 31 (S MILLIONS) 2019 2018 ASSETS Current Assets: Cash and Equivalents Accounts Receivable Inventory Prepaid Expenses Total Current Assets 7,722 6,283 44,269 3,623 61,897 6,756 5,614 43,783 3,511 59,664 Net Property, Plant & Equipment Goodwill Other Long-Term Assets Total Assets 111,395 114,818 31,181 18,242 14,822 11.798 219.295 204,522 LIABILITIES Current Liabilities: Accounts Payable Accrued Liabilities Short-Term Borrowings Current Portion of Long-Term Debt & Capital Leases Other Current Liabilities Total Current Liabilities Long-Term Debt & Capital Leases Deferred Income Taxes and Other Total Liabilities 47,060 22,159 5,225 2,605 428 77,477 46,092 22,122 5,257 4.405 645 78,521 50,203 36,825 11,981 8,354 139,661 123,700 EQUITY Common Stock and Paid-In Capital 3,253 2.943 Retained Earnings 80.785 85,107 Other Comprehensive Income (Loss) (11,542) (10.181) Total Common Equity 72.496 77,869 Non-Controlling Interest 7,138 2,953 Total Equity 79634 80822 Total Liabilities & Equity 219.295 204.522 Note: This balance sheet was simplified somewhat for ease of discussion. As of this date there were approximately 2,945 million shares outstanding Source: Created by the case author using data from Walmart Inc., 2019 Annual Report, 7, accessed April 30, 2019, https://s2.94cdn.com/056532643/files/doc_financials/2019/annual/Walmart-2019-AR-Final.pdf. 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 Operating, Selling, General & Administrative Expenses 107,147 106,510 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 Net Income Attrributable to Non-Controlling Interests (509) (661) Net Income Attributable to Walmart Shareholders 6670 9862 Note: This income statement was simplified somewhat for ease of discussion Source: Created by the case author using data from Walmart Inc., 2019 Annual Report, 7. accessed April 30, 2019, https://s2.94cdn.com/056532643/files/doc_financials/2019/annual Walmart-2019-AR-Final.pdf. EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 DPS 0.67 0.88 0.95 1.09 1.21 1.46 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 EPS 2.71 3.12 3.39 3.71 4.47 4.52 5.02 4.88 5.06 4.58 4.39 3.27 2.28 Stock Price 36.30 37.98 38.36 43.04 42.33 49.43 60.68 65.61 75.56 61.39 67.54 87.92 96.08 Total Return 10.07% 7.04% 3.52% 15.03% 1.15% 20.22% 25.97% 11.23% 18.10% - 16.17% 13.28% 33.20% 11.64% 1.59 1.88 1.92 1.96 2.00 2.04 2.08 Notes: As at fiscal year-end, January 31; EPS = earnings per share; DPS = dividends per share; Total Return = (Dividend + Price Change) + Previous Price Source: Created by the case author using dividend and stock price data from Walmart Inc. (WMT)." Yahoo! Finance, accessed February 20, 2019, https://finance.yahoo.com/quote/WMT/; and earnings data from "Walmart EPS Diluted (TTM): 2.28 for Jan. 31, 2019," YCharts, accessed February 20, 2019, https://ycharts.com/companies/WMT/eps_ttm. Note: This income statement was simplified somewhat for ease of discussion Source: Created by the case author using data from Walmart Inc. 2019 Annual Report. 7, accessed Apr 30, 2019, https://s2.dodh.com.066632643 s/doc_financials/2019/annual Walmar 2019-AR-Finalpot 8 01 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 37.98 704% 2009 3.39 0.95 38.36 3.52% 2010 371 1.09 43.04 15.03% 2011 4.47 121 42.33 1.15% 2012 1.45 4943 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 13.28% 2018 327 204 87 92 33 20% 2019 2.28 208 96.08 11.64% Notes: As at fiscal year-end, January 31; EPS earnings per share: DPS - dividends per share: Total Retur - Dividend Source: Created by the case author using dividend and stock price data from Walmart Inc. (WMT). Yahool Finance accessed February 20, 2019. https://finance.yahoo.com/quote/WMTI, and earnings data from Walmart EPS Dated (TTM 2.28 for Jan. 31,2019,Charts, accessed February 20, 2019. https:/ycharts.com.companies Westm. This document is authorized to use only Herita Patut harta293&sgnat com.Como es portes en rangement of conge Peme.com Page 8 9819N011 EXHIBITS: AVERAGE ANNUAL RETURNS IN U.S. CAPITAL MARKETS OVER THE PERIOD 1928-2018 S&P 500 (Includes Dividends) 3-Month Treasury B Return on 10- Year Treasury Bond Arithmetic Average 1928-2018 1969-2018 2009-2018 11.36% 11.10% 13.49% 3.43% 4.76% 0.49% 5.10% 7.10% 228% Geometric Average 1928-2018 1969-2018 2009-2018 9.49% 9.73% 12.98% 3.38% 4.71% 0.49% 483% 6.69% 1.97% Source: Created by the case author using data from Aswath Damodaran. "Annual Returns on Stock T Bonds and T. 1928-Current Aswath Damodaran (blog), accessed February 19, 2019, http people story dudamodarow_Home EXHIBIT 2: WALMART INC., CONSOLIDATED BALANCE SHEET AS OF JANUARY 31 ($ MILLIONS) 2019 2018 ASSETS Current Assets: Cash and Equivalents Accounts Receivable Inventory Prepaid Expenses Total Current Assets 7,722 6,283 44,269 3,623 61,897 6,756 5,614 43,783 3,511 59,664 Net Property, Plant & Equipment Goodwill Other Long-Term Assets Total Assets 111,395 114,818 31,181 18,242 14,822 11,798 219.295 204.522 LIABILITIES Current Liabilities: Accounts Payable Accrued Liabilities Short-Term Borrowings Current Portion of Long-Term Debt & Capital Leases Other Current Liabilities Total Current Liabilities 47,060 22,159 5,225 2,605 428 77,477 46,092 22,122 5,257 4,405 645 78,521 Long-Term Debt & Capital Leases Deferred Income Taxes and Other Total Liabilities 50,203 36,825 11,981 8,354 139,661 123,700 EQUITY Common Stock and Paid-In Capital Retained Earnings Other Comprehensive Income (Loss) Total Common Equity Non-Controlling Interest Total Equity 3,253 2,943 80,785 85,107 (11,542) (10,181) 72,496 77,869 7,138 2,953 79634 80822 Total Liabilities & Equity 219.295 204,522 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 Operating, Selling, General & Administrative Expenses 107,147 106,510 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 Net Income Attrributable to Non-Controlling Interests (509) (661) Net Income Attributable to Walmart Shareholders 6670 9862 he statement was simplified somewhat for ease of discussion. by the case author using data from Walmart Inc., 2019 Annual Report, 7, accessed A com/056532643/files/doc_financials/2019/annual/Walmart-2019-AR-Final.pdf. EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 Stock Price Total Return EPS DPS 2.71 0.67 3.12 10.07% 7.04% 3.52% 3.39 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 3.71 4.47 4.52 5.02 4.88 5.06 4.58 0.88 0.95 1.09 1.21 1.46 1.59 1.88 1.92 1.96 36.30 37.98 38.36 43.04 42.33 49.43 60.68 65.61 75.56 61.39 67.54 87.92 96.08 15.03% 1.15% 20.22% 25.97% 11.23% 18.10% -16.17% 4.39 3.27 2.28 2.00 2.04 2.08 13.28% 33. 20% 11.64% EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 EPS DPS 2.71 3.12 3.39 3.71 4.47 0.67 0.88 0.95 1.09 1.21 4.52 1.46 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Stock Price 36.30 3798 38.36 43.04 4233 49.43 60.68 65.61 75.56 61.39 67.54 8792 96.08 Total Return 10.07% 7.04% 3.52% 15.03% 1.15% 20.22% 25.97% 11.23% 18.10% - 16.17% 13.28% 33.20% 11.64% 5.02 4.88 5.06 4.58 4.39 3.27 1.59 1.88 1.92 1.96 2.00 2.04 2.08 2.28 year-end, January 31; EPS = earnings per share, DPS = dividends per share; Total Re "revious Price by the case author using dividend and stock price data from Walmart Inc. (WMT). y 20, 2019, https://finance.yahoo.com/quote/WMTI, and earnings data from "Walmart 019,"YCharts, accessed February 20, 2019, https:llycharts.com/companies/WMTleps_ y Harita Patel (harta2993gmail.com. Copying or posting is an intringement of copyright. Please contact 800-988-0886 for additional copies EXHIBIT 5: AVERAGE ANNUAL RETURNS IN U.S. CAPITAL MARKETS OVER THE PERIOD 1928-2018 S&P 500 (Includes Dividends) 3-Month Treasury Ball Return on 10- Year Treasury Bond Arithmetic Average 1928-2018 1969-2018 2009-2018 11.36% 11.10% 13.49% 3.43% 4.76% 0.49% 5.10% 7.10% 2.28% Geometric Average 1928-2018 1969-2018 2009-2018 9.49% 9.73% 12.98% 3.38% 4.71% 0.49% 4.83% 6.69% 1.97% EXHIBIT 2: WALMART INC., CONSOLIDATED BALANCE SHEET AS OF JANUARY 31 (S MILLIONS) 2019 2018 ASSETS Current Assets: Cash and Equivalents Accounts Receivable Inventory Prepaid Expenses Total Current Assets 7,722 6,283 44,269 3,623 61,897 6,756 5,614 43,783 3,511 59,664 Net Property, Plant & Equipment Goodwill Other Long-Term Assets Total Assets 111,395 114,818 31,181 18,242 14,822 11.798 219.295 204,522 LIABILITIES Current Liabilities: Accounts Payable Accrued Liabilities Short-Term Borrowings Current Portion of Long-Term Debt & Capital Leases Other Current Liabilities Total Current Liabilities Long-Term Debt & Capital Leases Deferred Income Taxes and Other Total Liabilities 47,060 22,159 5,225 2,605 428 77,477 46,092 22,122 5,257 4.405 645 78,521 50,203 36,825 11,981 8,354 139,661 123,700 EQUITY Common Stock and Paid-In Capital 3,253 2.943 Retained Earnings 80.785 85,107 Other Comprehensive Income (Loss) (11,542) (10.181) Total Common Equity 72.496 77,869 Non-Controlling Interest 7,138 2,953 Total Equity 79634 80822 Total Liabilities & Equity 219.295 204.522 Note: This balance sheet was simplified somewhat for ease of discussion. As of this date there were approximately 2,945 million shares outstanding Source: Created by the case author using data from Walmart Inc., 2019 Annual Report, 7, accessed April 30, 2019, https://s2.94cdn.com/056532643/files/doc_financials/2019/annual/Walmart-2019-AR-Final.pdf. 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 Operating, Selling, General & Administrative Expenses 107,147 106,510 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 Net Income Attrributable to Non-Controlling Interests (509) (661) Net Income Attributable to Walmart Shareholders 6670 9862 Note: This income statement was simplified somewhat for ease of discussion Source: Created by the case author using data from Walmart Inc., 2019 Annual Report, 7. accessed April 30, 2019, https://s2.94cdn.com/056532643/files/doc_financials/2019/annual Walmart-2019-AR-Final.pdf. EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 DPS 0.67 0.88 0.95 1.09 1.21 1.46 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 EPS 2.71 3.12 3.39 3.71 4.47 4.52 5.02 4.88 5.06 4.58 4.39 3.27 2.28 Stock Price 36.30 37.98 38.36 43.04 42.33 49.43 60.68 65.61 75.56 61.39 67.54 87.92 96.08 Total Return 10.07% 7.04% 3.52% 15.03% 1.15% 20.22% 25.97% 11.23% 18.10% - 16.17% 13.28% 33.20% 11.64% 1.59 1.88 1.92 1.96 2.00 2.04 2.08 Notes: As at fiscal year-end, January 31; EPS = earnings per share; DPS = dividends per share; Total Return = (Dividend + Price Change) + Previous Price Source: Created by the case author using dividend and stock price data from Walmart Inc. (WMT)." Yahoo! Finance, accessed February 20, 2019, https://finance.yahoo.com/quote/WMT/; and earnings data from "Walmart EPS Diluted (TTM): 2.28 for Jan. 31, 2019," YCharts, accessed February 20, 2019, https://ycharts.com/companies/WMT/eps_ttm. Note: This income statement was simplified somewhat for ease of discussion Source: Created by the case author using data from Walmart Inc. 2019 Annual Report. 7, accessed Apr 30, 2019, https://s2.dodh.com.066632643 s/doc_financials/2019/annual Walmar 2019-AR-Finalpot 8 01 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 37.98 704% 2009 3.39 0.95 38.36 3.52% 2010 371 1.09 43.04 15.03% 2011 4.47 121 42.33 1.15% 2012 1.45 4943 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 13.28% 2018 327 204 87 92 33 20% 2019 2.28 208 96.08 11.64% Notes: As at fiscal year-end, January 31; EPS earnings per share: DPS - dividends per share: Total Retur - Dividend Source: Created by the case author using dividend and stock price data from Walmart Inc. (WMT). Yahool Finance accessed February 20, 2019. https://finance.yahoo.com/quote/WMTI, and earnings data from Walmart EPS Dated (TTM 2.28 for Jan. 31,2019,Charts, accessed February 20, 2019. https:/ycharts.com.companies Westm. This document is authorized to use only Herita Patut harta293&sgnat com.Como es portes en rangement of conge Peme.com Page 8 9819N011 EXHIBITS: AVERAGE ANNUAL RETURNS IN U.S. CAPITAL MARKETS OVER THE PERIOD 1928-2018 S&P 500 (Includes Dividends) 3-Month Treasury B Return on 10- Year Treasury Bond Arithmetic Average 1928-2018 1969-2018 2009-2018 11.36% 11.10% 13.49% 3.43% 4.76% 0.49% 5.10% 7.10% 228% Geometric Average 1928-2018 1969-2018 2009-2018 9.49% 9.73% 12.98% 3.38% 4.71% 0.49% 483% 6.69% 1.97% Source: Created by the case author using data from Aswath Damodaran. "Annual Returns on Stock T Bonds and T. 1928-Current Aswath Damodaran (blog), accessed February 19, 2019, http people story dudamodarow_Home EXHIBIT 2: WALMART INC., CONSOLIDATED BALANCE SHEET AS OF JANUARY 31 ($ MILLIONS) 2019 2018 ASSETS Current Assets: Cash and Equivalents Accounts Receivable Inventory Prepaid Expenses Total Current Assets 7,722 6,283 44,269 3,623 61,897 6,756 5,614 43,783 3,511 59,664 Net Property, Plant & Equipment Goodwill Other Long-Term Assets Total Assets 111,395 114,818 31,181 18,242 14,822 11,798 219.295 204.522 LIABILITIES Current Liabilities: Accounts Payable Accrued Liabilities Short-Term Borrowings Current Portion of Long-Term Debt & Capital Leases Other Current Liabilities Total Current Liabilities 47,060 22,159 5,225 2,605 428 77,477 46,092 22,122 5,257 4,405 645 78,521 Long-Term Debt & Capital Leases Deferred Income Taxes and Other Total Liabilities 50,203 36,825 11,981 8,354 139,661 123,700 EQUITY Common Stock and Paid-In Capital Retained Earnings Other Comprehensive Income (Loss) Total Common Equity Non-Controlling Interest Total Equity 3,253 2,943 80,785 85,107 (11,542) (10,181) 72,496 77,869 7,138 2,953 79634 80822 Total Liabilities & Equity 219.295 204,522 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 Operating, Selling, General & Administrative Expenses 107,147 106,510 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 Net Income Attrributable to Non-Controlling Interests (509) (661) Net Income Attributable to Walmart Shareholders 6670 9862 he statement was simplified somewhat for ease of discussion. by the case author using data from Walmart Inc., 2019 Annual Report, 7, accessed A com/056532643/files/doc_financials/2019/annual/Walmart-2019-AR-Final.pdf. EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 Stock Price Total Return EPS DPS 2.71 0.67 3.12 10.07% 7.04% 3.52% 3.39 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 3.71 4.47 4.52 5.02 4.88 5.06 4.58 0.88 0.95 1.09 1.21 1.46 1.59 1.88 1.92 1.96 36.30 37.98 38.36 43.04 42.33 49.43 60.68 65.61 75.56 61.39 67.54 87.92 96.08 15.03% 1.15% 20.22% 25.97% 11.23% 18.10% -16.17% 4.39 3.27 2.28 2.00 2.04 2.08 13.28% 33. 20% 11.64% EXHIBIT 4: SELECTED DATA ON WALMART INC., 2007-2019 EPS DPS 2.71 3.12 3.39 3.71 4.47 0.67 0.88 0.95 1.09 1.21 4.52 1.46 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Stock Price 36.30 3798 38.36 43.04 4233 49.43 60.68 65.61 75.56 61.39 67.54 8792 96.08 Total Return 10.07% 7.04% 3.52% 15.03% 1.15% 20.22% 25.97% 11.23% 18.10% - 16.17% 13.28% 33.20% 11.64% 5.02 4.88 5.06 4.58 4.39 3.27 1.59 1.88 1.92 1.96 2.00 2.04 2.08 2.28 year-end, January 31; EPS = earnings per share, DPS = dividends per share; Total Re "revious Price by the case author using dividend and stock price data from Walmart Inc. (WMT). y 20, 2019, https://finance.yahoo.com/quote/WMTI, and earnings data from "Walmart 019,"YCharts, accessed February 20, 2019, https:llycharts.com/companies/WMTleps_ y Harita Patel (harta2993gmail.com. Copying or posting is an intringement of copyright. Please contact 800-988-0886 for additional copies EXHIBIT 5: AVERAGE ANNUAL RETURNS IN U.S. CAPITAL MARKETS OVER THE PERIOD 1928-2018 S&P 500 (Includes Dividends) 3-Month Treasury Ball Return on 10- Year Treasury Bond Arithmetic Average 1928-2018 1969-2018 2009-2018 11.36% 11.10% 13.49% 3.43% 4.76% 0.49% 5.10% 7.10% 2.28% Geometric Average 1928-2018 1969-2018 2009-2018 9.49% 9.73% 12.98% 3.38% 4.71% 0.49% 4.83% 6.69% 1.97%