This chapter stressed the importance of evaluating potential investments. Now its your turn to try your skill

Question:

This chapter stressed the importance of evaluating potential investments. Now it’s your turn to try your skill at evaluating a potential investment in the Walmart Corporation. Assume you could invest $10,000 in the common stock of this company. To help you evaluate this potential investment, carefully examine Exhibit 14-7, which reproduces the research report on Walmart from Value Line.

The report was published on January 24, 2020.WALMART INC. NYSE-WHIT TIMELINESS 1 Raised 12/27/19 SAFETY 1 Raised 2/15/02 TECHNICAL 2 Raised 1/3/20 BETA 75

CAPITAL STRUCTURE as of 10/31/19 Total Debt $58467 mill. Due in 5 Yrs $21569 mill. LT Debt $48980 mill. LT

formance in the though associates must wear Past 10 Yrs. 5 Yrs. to 22/24 The company's net sales rose 3.3%


Questions 

1. Based on the research provided by Value Line, would you buy Walmart’s stock? Justify your answer.

2. What other investment information would you need to evaluate Walmart's common stock? Where would you obtain this information?

3. On January 24, 2020, Walmart’s common stock was selling for $116 a share. Using the internet, determine the current price for a share of Walmart’s common stock. Based on this information, would your investment have been profitable if you had purchased the common stock for $116 a share?

4. Assuming you purchased Walmart’s stock on January 24, 2020, and based on your answer to question 3, would you want to hold or sell your Walmart stock? Explain your answer.

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Personal Finance

ISBN: 9781264101597

14th Edition

Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart

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