Using the Annual Report 2022 of HomeDepot (company's website), answer the following questions:

1.Compute the growth rate of the firm´s cash flows as the annual growth rate of the EBIT from the fiscal year 2021 until the last fiscal year (2022).

2. Compute the cost of debt as the payments relating to non-current financial debt in the last fiscal year over non-current liabilities in the previous fiscal year.

3.Compute the cost of equity using the CAPM. To estimate the CAPM beta use daily data of the last fiscal year. As the market, use the SP500 index. Set the risk-free rate to 2%. Set the expected market premium to 7%. 1.4- Set the corporate tax rate to the average tax.

Answer rating: 100% (QA)

1 The EBIT for the fiscal year 2021 was 22716 million and for the fiscal year 2022 it was 25377 mill... View the full answer