Using the Annual Report 2022 of HomeDepot, answer the following questions:

2.1- Compute the value of the firm assuming the growth rate of its EBIT is constant and the debt-equity ratio will be constant and equal 0.70.

2.2 Compute the value of the firm assuming the growth rate of its EBIT is constant and the interest coverage ratio will be constant and equal to the one in the last fiscal year. Why the result is lower/equal/higher than before?

2.3 Assume the firm selects the optimal interest coverage ratio and maintains this ratio constant forever (corporate taxes are the only deviation from perfect capital markets). What would be the value of the firm? Compare it with the values obtained in 2.1 and 2.2. Explain the differences.

2.4 Obtain the market price of equity on December 31, 2022. Assuming the debt-equity ratio is indeed 0.70, what is the value of the firm? Which ingredients have we left out and can explain the difference?

2.5 Assume we did not miss any ingredient but our computation of the earnings growth is not accurate. Under the assumptions in 2.1, which growth rate of earnings would make the firm be worth the value obtained in 2.4.

3.1 Describe briefly the firms payout for the calendar year 2022.

3.2 Explain one drawback of distributing dividends instead of retained earnings, and assess its relevance in the context of the firm of this assignement. The use of data is highly valuable.

3.3 Explain one advantadge of dividends versus retained earnings and assess its relevance in the context of the firm of this assignement. The use of data is highly valuable.