Purchase Solution

Holt's model

Not what you're looking for?

Ask Custom Question

See attached file.

Determine BOTH the WACC and Holt's Valuation for Whole Foods Market Inc's stock.

We will be using $0 as the dividend and $26.67 as the recent share price of the stock. Tax rate for the company is 41.5%.
Additional company data can be found here:
http://www.marketwatch.com/story/10-k-whole-foods-market-inc-2009-11-27

HERE IS THE FORMULA FOR W.A.C.C.:

WACC = E/V * Re + D/V * Rd * (1-Tc)

Where:
Re = cost of equity
Rd = cost of debt
E = market value of the firm's equity
D = market value of the firm's debt
V = E + D
E/V = percentage of financing that is equity
D/V = percentage of financing that is debt
Tc = corporate tax rate

AND HERE IS INFORMATION FOR THE HOLT'S MODEL: (*:fair value)
We need to compare against: Retailing Foods Industry as well as the competitor Kroger, Inc.
This is an example of what the model should look like (see attached).

Purchase this Solution

Solution Summary

This solution is comprised of a detailed explanation of Holt's model.

Solution provided by:
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
Recent Feedback
  • "I've posted a similar question for another course. It's post 657940, and it's a practice problem that I'd like to use for the final exam. Your help will be greatly appreciated. "
  • "thank you!"
  • "Thank you again Jayant. You are super fast. "
  • "Thank you Jayant. You are appreciated. "
  • "Again, thank you Jayant. You are wonderful. "
Purchase this Solution


Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.