For each firm, calculate the return on equity (ROE), the dividend per share, and the earnings per share for the five years. Record them in a spreadsheet. b. Calculate the dividend payout ratio (dividends per share/earnings per share) and the retention ratio (1-dividend payout ratio) for each year. c. Compute the growth rate, g = b  ROE, where b equals the retention ratio, for each year.

2. Estimate the cost of equity for Wal-mart and Xcel. a. Estimate raw betas using monthly return data of each company and S&P 500 index for the past five years. b. Use Blume (1971) to estimate the adjusted betas of two companies. c. Download monthly adjusted closing prices for S&P 500 index (ticker symbol ^GSPC) for the past 15 years from finance.yahoo.com and calculate monthly returns of S&P 500 index. d. Calculate the average monthly return of S&P 500 index based on the fifteen year's data in c) and annualize the monthly index return to annualized return for the index. (1 point) e. Apply capital asset pricing model to estimate the cost of equity for WMT and Xel, respectively. You can use 10-year Treasury bond yield as the proxy of risk-free rate and the annualized S&P 500 index return in d) as the expected market return in your CAPM.

Walmart Inc. (NYSE:WMT) > Financials > Income Statement
In Millions of the reported currency, except per share items.	Template:	Standard		Restatement:	Latest Filings
	Period Type:	Annual		Order:	Latest on Right
	Currency:	Reported Currency		Conversion:	Historical
	Units:	S&P Capital IQ (Default)		Decimals:	Capital IQ (Default)
	Source:	Capital IQ & Proprietary Data
Income Statement
For the Fiscal Period Ending	Reclassified 12 months Jan-31-2018	Reclassified 12 months Jan-31-2019	12 months Jan-31-2020	12 months Jan-31-2021	12 months Jan-31-2022	LTM 12 months Jul-31-2022
Currency	USD	USD	USD	USD	USD	USD
Revenue	500,343.0	514,405.0	523,964.0	559,151.0	572,754.0	587,824.0
Other Revenue	-	-	-	-	-	-
Total Revenue	500,343.0	514,405.0	523,964.0	559,151.0	572,754.0	587,824.0
Cost Of Goods Sold	373,396.0	385,301.0	394,605.0	420,315.0	429,000.0	443,230.0
Gross Profit	126,947.0	129,104.0	129,359.0	138,836.0	143,754.0	144,594.0
Selling General & Admin Exp.	106,010.0	107,147.0	107,891.0	111,888.0	117,812.0	120,743.0
R & D Exp.	-	-	-	-	-	-
Depreciation & Amort.	-	-	-	-	-	-
Other Operating Expense/(Income)	-	-	-	-	-	-
Other Operating Exp., Total	106,010.0	107,147.0	107,891.0	111,888.0	117,812.0	120,743.0
Operating Income	20,937.0	21,957.0	21,468.0	26,948.0	25,942.0	23,851.0
Interest Expense	(2,330.0)	(2,346.0)	(2,599.0)	(2,315.0)	(1,994.0)	(1,847.0)
Interest and Invest. Income	152.0	217.0	189.0	121.0	158.0	358.0
Net Interest Exp.	(2,178.0)	(2,129.0)	(2,410.0)	(2,194.0)	(1,836.0)	(1,489.0)
Other Non-Operating Inc. (Exp.)	-	(2.0)	87.0	22.0	(127.0)	(69.0)
EBT Excl. Unusual Items	18,759.0	19,826.0	19,145.0	24,776.0	23,979.0	22,293.0
Restructuring Charges	(500.0)	-	(900.0)	(400.0)	-	-
Impairment of Goodwill	-	-	-	-	-	-
Gain (Loss) On Sale Of Invest.	-	(3,516.0)	1,886.0	8,589.0	(2,440.0)	(1,409.0)
Gain (Loss) On Sale Of Assets	-	(4,850.0)	(15.0)	(8,401.0)	(433.0)	0
Other Unusual Items	(3,136.0)	-	-	(4,000.0)	(2,410.0)	(2,410.0)
EBT Incl. Unusual Items	15,123.0	11,460.0	20,116.0	20,564.0	18,696.0	18,474.0
Income Tax Expense	4,600.0	4,281.0	4,915.0	6,858.0	4,756.0	4,459.0
Earnings from Cont. Ops.	10,523.0	7,179.0	15,201.0	13,706.0	13,940.0	14,015.0
Earnings of Discontinued Ops.	-	-	-	-	-	-
Extraord. Item & Account. Change	-	-	-	-	-	-
Net Income to Company	10,523.0	7,179.0	15,201.0	13,706.0	13,940.0	14,015.0
Minority Int. in Earnings	(661.0)	(509.0)	(320.0)	(196.0)	(267.0)	(145.0)
Net Income	9,862.0	6,670.0	14,881.0	13,510.0	13,673.0	13,870.0
Pref. Dividends and Other Adj.	-	-	-	-	-	-
NI to Common Incl Extra Items	9,862.0	6,670.0	14,881.0	13,510.0	13,673.0	13,870.0
NI to Common Excl. Extra Items	9,862.0	6,670.0	14,881.0	13,510.0	13,673.0	13,870.0
Per Share Items
Basic EPS	$3.29	$2.28	$5.22	$4.77	$4.9	$5.02
Basic EPS Excl. Extra Items	3.29	2.28	5.22	4.77	4.9	5.02
Weighted Avg. Basic Shares Out.	2,995.0	2,929.0	2,850.0	2,831.0	2,792.0	2,761.0
Diluted EPS	$3.28	$2.26	$5.19	$4.75	$4.87	$5.0
Diluted EPS Excl. Extra Items	3.28	2.26	5.19	4.75	4.87	5.0
Weighted Avg. Diluted Shares Out.	3,010.0	2,945.0	2,868.0	2,847.0	2,805.0	2,772.5
Normalized Basic EPS	$3.69	$4.06	$4.09	$5.4	$5.27	$4.99
Normalized Diluted EPS	3.68	4.03	4.06	5.37	5.25	4.97
Dividends per Share	$2.04	$2.08	$2.12	$2.16	$2.2	$2.22
Payout Ratio %	62.1%	91.5%	40.6%	45.3%	45.0%	44.3%
Shares per Depository Receipt	0.063	0.063	0.063	0.063	0.063	0.063
Supplemental Items
EBITDA	31,466.0	32,635.0	32,455.0	38,100.0	36,600.0	34,586.0
EBITA	20,937.0	21,957.0	21,468.0	26,948.0	25,942.0	23,851.0
EBIT	20,937.0	21,957.0	21,468.0	26,948.0	25,942.0	23,851.0
EBITDAR	34,366.0	35,635.0	35,816.0	41,503.0	39,697.0	NA
As Reported Total Revenue*	500,343.0	514,405.0	523,964.0	559,151.0	572,754.0	587,824.0
Effective Tax Rate %	30.4%	37.4%	24.4%	33.3%	25.4%	24.1%
Current Domestic Taxes	3,403.0	3,256.0	3,381.0	3,733.0	3,962.0	3,962.0
Current Foreign Taxes	1,377.0	1,495.0	1,205.0	1,127.0	1,553.0	1,553.0
Total Current Taxes	4,780.0	4,751.0	4,586.0	4,860.0	5,515.0	5,515.0
Deferred Domestic Taxes	(34.0)	(377.0)	698.0	2,339.0	(630.0)	(630.0)
Deferred Foreign Taxes	(146.0)	(93.0)	(369.0)	(341.0)	(129.0)	(129.0)
Total Deferred Taxes	(180.0)	(470.0)	329.0	1,998.0	(759.0)	(759.0)
Normalized Net Income	11,063.4	11,882.3	11,645.6	15,289.0	14,719.9	13,788.1
Interest on Long Term Debt	NA	NA	306.0	298.0	232.0	NA
Filing Date	Mar-20-2020	Mar-19-2021	Mar-18-2022	Mar-18-2022	Mar-18-2022	Sep-02-2022
Restatement Type	RC	RC	NC	NC	O	O
Calculation Type	REP	REP	REP	REP	REP	LTM
Supplemental Operating Expense Items
Advertising Exp.	3,100.0	3,500.0	3,700.0	3,200.0	3,900.0	NA
Selling and Marketing Exp.	3,100.0	3,500.0	3,700.0	3,200.0	3,900.0	3,900.0
Net Rental Exp.	2,900.0	3,000.0	3,361.0	3,403.0	3,097.0	NA
Imputed Oper. Lease Interest Exp.	1,159.5	1,071.1	1,062.1	921.6	809.5	-
Imputed Oper. Lease Depreciation	1,740.5	1,928.9	2,298.9	2,481.4	2,287.5	-
Stock-Based Comp., SG&A Exp.	626.0	773.0	854.0	1,169.0	1,163.0	1,163.0
Stock-Based Comp., Total	626.0	773.0	854.0	1,169.0	1,163.0	1,163.0
* Occasionally, certain items classified as Revenue by the company will be re-classified as other income if it is deemed to be non-recurring and unrelated to the core business of the firm. This field shows Total Revenue exactly as reported by the firm on its consolidated statement of income.
Note: For multiple class companies, per share items are primary class equivalent, and for foreign companies listed as primary ADRs, per share items are ADR-equivalent.

Answer rating: 100% (QA)

Here are the calculations for Walmart for the past 5 years 1 Return on Equity ROE Net Incom... View the full answer