Use the income statement and balance sheet for Wal-Mart (see Appendix A) to gather the necessary information

Question:

Use the income statement and balance sheet for Wal-Mart (see Appendix A) to gather the necessary information to calculate Wal-Mart’s Economic Value Added (EVA®) for 2009 and 2008. Wal-Mart’s weighted average cost of capital (WACC) has been estimated to be anywhere between 8% and 13%.

1. Calculate 2009 and 2008 EVA® for Wal-Mart assuming a WACC of 8%.

2. Calculate 2009 and 2008 EVA® for Wal-Mart assuming a WACC of 13%.

3. How do the two WACC values affect the EVA® calculation?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...