This report provides a comprehensive financial analysis of Woolworths Group Limited and Wesfarmers Group, covering a three-year period. It calculates daily stock price returns and market index returns, determines total, systematic, and unsystematic risks for each company annually, and calculates the weighted average cost of capital (WACC), explaining differences in costs of capital. The report also compares and contrasts the dividend policies of both companies by calculating dividend payout ratios. Finally, it concludes with a recommendation on which company's shares to purchase with a $10 million inheritance, based on the analysis of dividend policies, cost of equity, and weighted average cost of capital, ultimately favoring investment in Woolworths due to its lower weighted average cost of capital despite Wesfarmers' higher potential dividend payout.
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