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Answer 1:
Sl No Particular Rate
1 Market Risk Premium 6%
2 Beta 1.2
3 Bond Rating A
4
Yield Spread between Treasury and 10 year
Industrial Bond 2.50%
5 10 Year T Bond Yield 1.60%
6 Total Debt (Book Value) 26807000
7 Market Capitalisation
2470110000
00
8 Total
2470378070
00
9 Desired return on Equity based on CAPM 8.79600%
10 Cost of Debt 3.07%
11 WACC 8.795%
The Weighted Average Cost of Capital of the company is 8.795% as computed in
excel and shown above.
Answer 2:
Statement of cash flowsDollars in thousands
For the year ending 20xx
Cash flow from operating activities
Net earnings (loss) $508
Depreciation $8,967
Amortization of software1 $4,482
Increase in receivables
($1,39
6)
Decrease in inventories $3,243
Decrease in other operating current assets $400
Increase in payables $652
Increase in accrued expenses $1,210
Net cash from operating activities
$18,06
6
Cash flow from investing activities
Payment for property, plant, and equipment
($6,57
7)
Proceeds from disposition of plant and equipment2 $1,923
Investment in software
($2,90
9)
Purchases of marketable securities/financial assets
($8,26
0)
Proceeds from sale of marketable securities/financial $8,501

assets
Net cash used in investing activities
($7,32
2)
Cash flow from financing activities
Proceeds from new debt
$11,62
5
Payments to settle debt
($24,3
41)
Cash dividend paid ($757)
Net cash provided (used in) financing activities
($13,4
73)
Net change in cash and cash equivalents
($2,72
9)
Cash and cash equivalents at January 1
$12,52
3
Cash and cash equivalents at December 31 $9,794
Notes
1. Amortization is in effect similar to depreciation and a non-cash item.
2. Assume profit from asset sale is zero.
Additional information needed (from income
statement)
Interest payment ($601)
Interest income $67
Tax rate 25%
Particulars
Amou
nt
Net Earnings (Loss) ($508)
Add Tax ($169)
Earning before Tax ($677)
Add Interest Payment ($601)
Less Interest Income $67
EBIT ($143)
Tax ($36)
Net operating profit after Tax ($108)
Add: Non Cash items
Depreciation $8,967
Amortization of software1 $4,482
NOPAT + Non cash item
$13,34
1
Change in Working Capital
Increase in receivables
($1,39
6)

Decrease in inventories $3,243
Decrease in other operating current assets $400
Increase in payables $652
Increase in accrued expenses $1,210
Operating Cash Flow
$17,45
0
Capital Expenditure
Payment for property, plant, and equipment
($6,57
7)
Proceeds from disposition of plant and equipment2 $1,923
Investment in software
($2,90
9)
Purchases of marketable securities/financial assets
($8,26
0)
Proceeds from sale of marketable securities/financial
assets $8,501
Interest Income $50
($7,27
2)
Free Cash Flow
$10,17
9
NOPAT =($108)
Operating Cash Flow =$18,066
Free Cash Flow =$$10,179
Answer 3:
Home Depot: Income Statement
Period Ending 03-Feb-19
28-Jan-
18
(millions, except per share data)
Total Sales $1,08,203
$1,00,9
04
Cost of Sales $71,043 $66,548
Gross Profit $37,160 $34,356
Selling General and
Administrative $19,513 $17,864
Depreciation & Amortization $1,870 $1,811
Impairment loss $247
Operating Income or Loss $15,530 $14,681
Total Other Income/Expenses $77 $74