Estimate Walmart’s weighted average cost of capital (WACC). State any assumptions and your methodology in a clear and concise manner. 

  

EXHIBIT 2: WALMART INC., CONSOLIDATED BALANCE SHEET AS OF JANUARY 31 ($ MILLIONS) 2019 2018 ASSETS Current Assets: Cash and Equivalents Accounts Receivable 7,722 6.283 44,269 6,756 5,614 43,783 Inventory Prepaid Expenses Total Current Assets 3.623 61,897 3.511 59,664 Net Property, Plant & Equipment Goodwill 111,395 114,818 31,181 18,242 Other Long-Term Assets Total Assets 11,798 14,822 219.295 204.522 LIABILITIES Current Liabilities: Accounts Payable Accrued Liabilities 47,060 22,159 5,225 46,092 Short-Term Borrowings Current Portion of Long-Term Debt & Capital Leases Other Current Liabilities 22,122 5,257 4,405 2,605 428 645 Total Current Liabilities 77,477 78,521 50,203 Long-Term Debt & Capital Leases Deferred Income Taxes and Other 36,825 11.981 8.354 139,661 123,700 Total Liabilities EQUITY 3,253 80,785 2,943 85,107 Common Stock and Paid-In Capital Retained Earnings Other Comprehensive Income (Loss) Total Common Equity Non-Controlling Interest Total Equity (11.542) (10.181) 72,496 7,138 79634 77,869 2,953 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.q4cdn.com/056532643/files/doc_financials/2019/annual/Waimart-2019-AR-Final.paf.