• Walmart can borrow at an after-tax interest rate of 2.87%.
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• Walmart's beta is .48.
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• The required return on the risk-free 10-year bond is 2.5%.
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• The market or equity risk premium which is the excess that stocks must pay over the risk-free rate or (R_e - R_f) is 5%.
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• Walmart is financed with 20% debt and 80% with equity.
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• Using this information, calculate Walmart's cost of capital to a percentage with two decimals (for example 1.87%).

Answer rating: 100% (QA)

Cost of equity as per CAPM can be computed as Rf beta Risk Pr... View the full answer