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Calculate walmart cost of capital

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Reference no: EM133076335

Please use the following information to answer this question:

  • Walmart can borrow at an after-tax interest rate of 2.87%. 
  • Walmart's beta is .48.
  • The required return on the risk-free 10-year bond is 2.5%.
  • The market or equity risk premium which is the excess that stocks must pay over the risk-free rate or (Re - Rf) is 5%.
  • Walmart is financed with 20% debt and 80% with equity.

Using this information, please calculate Walmart's cost of capital to a percentage with two decimals (for example 1.87%).

Reference no: EM133076335

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