Financial Returns and Capital Constraints
In order to be successful, companies must leverage their spending in ways that will add to their value and propel them in the marketplace. In this portion of your report you will analyze the business conditions and begin to create the big financial picture of Wal-Mart is spending their money and managing their investments in the future value of their organization through purchases and research and development.
Include the following content in this section.
· Formulate the expected financial returns and associated risks by completing the following calculations. (What do the results of these calculations say about the overall health of the company and its future value?)
o Calculate the Return on Equity (ROE) using the DuPont system.
o Calculate the Constant Growth Stock Valuation (CGSV) and compare it to the current stock price.
