QUESTION: Class, for your next post, review the findings of another student. Explain in detail why the CAPM or the WACC for these firms differ from each other. If you were the Stock Analyst, what would be your recommendations? Remember to always share your references and use your own words.

PLEASE USE THE FOLLOWING POST BELOW TO ANSWER THE QUESTION ABOVE.

WACC stands for Weighted Average Cost of Capital. It's the average cost of capital of all the sources that includes bonds, common stock, preferred stock. It tells the lenders or shareholders the returns they expect to receive for providing capital to a company. An example would be if a lender needs 20% and a shareholder need 30%, than a company's WACC is 25%. Fresh Market right now is at 8.8 for WACC Kroger right now is at 6.81 for WACC WACC Calculation WACC 6.87% Cost of Equity 7.93% Equity Weight 74.29% Cost of Debt 3.79% Debt Weight 25.71% The WACC for Kroger Co (NYSE:KR) is 6.87%.. multiplying all of them to get 6.87 Kroger is still being undervalued