Estimating Walmart’s Cost of Capital

Estimating Walmart’s Cost of Capital
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Estimating Walmart’s Cost of Capital
Walmart's cost of capital for the 2019 financial year is 5.46%. From the case written by Foerster (2019), Dale and Lee cared about the cost of capital because it remains significant in corporate decision-making that helps organizations to reach the profitability stage to achieve potential wealth maximization. Dale and Lee can measure and evaluate Walmart's business plans and activities by using the cost of capital to analyze Walmart's financial aspects. Besides, Dale and Lee seek to evaluate Walmart's investing opportunities, so the cost of capital plays a critical role in making significant budgetary calls that use Walmart's financial resources as capital. Again, the cost of capital assists in making critical dividends decisions because it acts as the expected rate of return, attracting capital to a specific opportunity cost. Because the cost of capital is also market-...