Part C Target Corporation: Cost of Capital

According to its annual report, as of January 31, 2012, Targets borrowing costs averaged 4.6 percent, and its tax rate was 34.27 percent. A research report estimated Targets cost of capital at 10.5 percent. The firm had interest-bearing debt of $17,483. Moreover, Targets stock was trading at $50.81 per share, and there were 679.1 million shares outstanding. Now, lets assume Targets amount of debt is also a market value estimate of the debt. Lets also assume the current debt and equity values are at Targets optimal capital structure.

Based on market value estimates, what is Targets cost of capital?

How does it compare to Walmarts, and what explains the difference?