Estimate walmart share price today

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1. Analysts expect Walmart to have earnings per share of $5.60 for the coming year (year 1). Walmart intends to invest heavily in its online platform in the near term and therefore plans to retain and reinvest 60% of its earnings for the next three years (years 1, 2 and 3). For the next two years (years 4 and 5), retention and reinvestment is anticipated to decrease, with Walmart expected to retain 50% of its earnings. After that (year 6 onwards) the retention rate is expected to drop to 40% and remain that way. Walmart's new investments in online shopping are expected to generate a return of 15% per year. Walmart's equity cost of capital is estimated to be 8%.

a. Using the information provided above, estimate Walmart's share price today.

Reference no: EM132826066

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