Question :

Please read the case on Walmart uploaded separately and answer the following

questions. While answering these questions please show all the necessary

calculations and provide clear arguments to support your view. Note, you are

allowed to use facts, figures and numbers from the case only. Use of facts which

are not provided in the case is not permitted.

A. How should Dale and Lee go about estimating the cost of long-term debt?

B. If Walmart had preferred shares, or planned to issue preferred shares, how

would Dale and Lee deal with them?

C.How might Dale and Lee go about estimating the cost of equity?

D. What is the overall weighted average cost of capital (WACC)?

E. How does all of this relate to hurdle rates that Walmart might use?