Walmart Store Inc.

(WMT)
DATE 4/18/2017

A. Data 2011 2012 2013 2014

ROE 21.80% 22.30% 21.90% 20.20%
EPS (GAAP Actual) 4.47 4.52 5.02 4.88
Dividend 1.46 1.59 1.88 1.92
Payout Ratio
Plowback Ratio (R.E)

B. Long-term Growth rate calculations

EPS Dividend
1. Use historical average
3.10% 7.6%

2. Use forcasted growth rate 4.00%

3. g= ROExb
ROE= 20.94%
b= 67.00%
g= 14.03%

4. Growth rate at maturity

Growth rate at maturity (g) 3.98%

C. Discount rate calculations

Current beta 0.716
Risk-free rate 1.83%
Market risk premium 7.54%
Required rate of return on equity (k) 7.23%

D. Two-stage DDM
Historical
Growth Rate 7.64%
Year t Dividend Present Value
12/31/2016 -0.30 2.05 2.09
12/31/2017 0.70 2.21 2.10
12/31/2018 1.70 2.38 2.11
12/31/2019 2.70 2.56 2.12
Grwoth Years 12/31/2020 3.71 2.75 2.12
12/31/2021 4.71 2.96 2.13
12/31/2022 5.71 3.19 2.14
12/31/2023 6.71 3.43 2.15
12/31/2024 7.71 3.69 2.16
Terminal Value 12/31/2024 7.71 118.13 68.98
Intrin/share 88.11

E. Multi-stage DDM
Year t Growth EPS
12/31/2016 -0.30 4.57

Growth Years
 12/31/2017 0.70 4.07% 4.76
12/31/2018 1.70 4.07% 4.95
12/31/2019 2.70 4.07% 5.15
Growth Years 12/31/2020 3.71 4.07% 5.36
12/31/2021 4.71 4.07% 5.58
12/31/2022 5.71 4.07% 5.81
12/31/2023 6.71 4.07% 6.04
12/31/2024 7.71 4.07% 6.29
12/31/2025 8.71 4.06% 6.54
12/31/2026 9.71 4.05% 6.81
12/31/2027 ### 4.03% 7.08
12/31/2028 ### 4.02% 7.37
Transitional Years
12/31/2029 ### 4.01% 7.66
12/31/2030 ### 4.00% 7.97
12/31/2031 ### 3.99% 8.29
12/31/2032 ### 3.98% 8.62
12/31/2033 ### 3.98% 8.96
Beginning of Constant Growth (Terminal Value)
12/31/2033 ###
 2015 2016 2017-2019
18.50% 18.00% 19.00%
5.05 4.57 6.90
1.96 2.05 2.25
41% 46% 33%
53.84% 67.00%

Forceasted
Growth Rate 4.00% g=ROE * b 14.03%
Dividend Present Value Dividend Present Value
2.05 2.09 2.05 2.09
2.13 2.03 2.34 2.23
2.22 1.97 2.67 2.37
2.31 1.91 3.04 2.52
2.40 1.85 3.47 2.68
2.49 1.80 3.95 2.85
2.59 1.74 4.51 3.03
2.70 1.69 5.14 3.22
2.81 1.64 5.86 3.42
89.71 52.38 187.38 109.42
69.10 133.81

PoR Dividend PV
46.16% 2.11 2.15
 43.51% 2.07 1.97
43.51% 2.15 1.91
43.51% 2.24 1.86
43.51% 2.33 1.80
43.51% 2.43 1.75
43.51% 2.53 1.70
43.51% 2.63 1.65
43.51% 2.74 1.60
43.70% 2.86 1.56
43.88% 2.99 1.52
44.07% 3.12 1.48
44.26% 3.26 1.44
44.44% 3.41 1.40
44.63% 3.56 1.37
44.81% 3.71 1.33
45.0% 3.88 1.30
45.00% 4.03 1.26
128.91 40.16
Intrin/share 40.16
= Input cells
= Calculation
 Walmart Store Inc. (WMT)
Relative valuation with P/E ratio
DATE 4/18/2017

1. Use forcasts on WMT Year 12/31/2016 t= -0.29589

Forward P/E Ratio 16.00
x Forward EPS 4.80
P* 76.80
Intrin/share 78.40

2. Use relative P/E ratio Year 12/31/2016 t= -0.29589 * Relative to S&P 500, industry average
Benchmark Forward P/E Ratio 18.62
Relaive P/E Ratio 0.83 2010
Forward P/E Ratio 15.54 2011
x Forward EPS 4.80 2012
P* 74.58 2013
Intrin/share 76.13 2014

3. Use Market Regression Year 12/31/2016 t= -0.29589 * From www.damodaran.com

PE = 6.48 + 98.58 gEPS + 16.77 Payout - 3.25 Beta
Coefficients WMT
Constant 6.48 1.00 6.48
gEPS 98.58 0.04 3.92
Payout 16.77 0.41 6.88
Beta -3.25 0.72 -2.33
Expected P/E Ratio 14.95
x Forward EPS 4.80
P* 71.75
Intrin/share 73.24
(WMT)
P/E ratio = Input cells
= Calculation

* Relative to S&P 500, industry average, or industry median

S&P 500 Consumer Staples WMT Relative P/E Ratio
15.64 13.28 0.85
16.03 13.13 0.82
16.27 13.57 0.83
18.46 15.58 0.84
20.63 17.04 0.83

* From www.damodaran.com