MBA Case Study Competition 2016
Real Vision Investment Case Study
Walmart vs Amazon
Team Single Voice
Brigham Young University
Matt Drage
Chace Jones
Holly Preslar
MBA Case Competition 2016
Real Vision Investment Case Study
Introduction
The internet has initiated a transformation in the retail industry that is affecting nearly every
segment of the market. Amazon has historically dominated the online retail space, but Walmart is
far from becoming irrelevant. In fact, insights into the retail market have shown that it is Walmart,
not Amazon that is better positioned to be successful in an online era. Though online e-commerce
is important, what is essential is a company’s ability to integrate online techniques with a physical
presence to provide customers with an “omnichannel” experience. Companies that are able to
combine both aspects of shopping into an intertwined experience are those that will ultimately
provide the most value to investors. Walmart’s impressive global presence, its understanding of
core customers, and its ability to continually provide profits and dividends to shareholders secure
its position as the better long-term investment in an internet age.
Company Profiles
Walmart was founded in 1962 based on a model of providing low prices, creating economies of
scale, and minimizing operating costs. Walmart experienced almost immediate success – by 1970
it became a publicly traded company and by 1990 had spread internationally. Brick and mortar
retail operations have remained incredibly strong through the decades – Walmart has an imposing
physical presence (11,526 retail stores and 158 distribution centersi) and has continued to develop
and maintain a significant competitive advantage through that physical footprint. Financially
speaking the company has also had a long history of providing positive earnings and dividend
returns with a YoY growth of 3% on its stock price from 2000 to 2014ii.
Amazon.com was founded in 1994 by its current CEO, Jeff Bezos. It became publicly traded in
1997 and has experienced impressive growth in both revenue and stock price from 2000 to 2014.
Despite this growth, however, Amazon has yet to be considered profitable due to extremely low
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Real Vision Investment Case Study
profit margins that consistently hover around zero. Observed growth in stock price cannot be
related to current profitability, since profitability has historically been nonexistent, but instead is a
result of analyst expectations that, due in part to Amazon’s proven track record of innovation,
Amazon will continue to have high revenue growth and will soon begin to generate a profit.
Financial Analysis
Since January 2015, both Walmart and Amazon have experienced significant changes in stock
price impacting the overall market value of each company. Amazon’s stock price has risen 112%
YTD as of November 6, 2015 while Walmart’s price has dropped 32%. Amazon’s trailing P/E
ratio is 945 while Walmart’s is 12iii. Based on this information it would appear likely that each
company is mispriced – Amazon overvalued, and Walmart undervalued. Surprisingly the
conclusion of the analyses below shows that each is reasonably priced in relation to peer companies
based on projected growth and earnings expectations.
We have compared both Walmart and Amazon market multiples to five of the best comparable
companies (see Appendix A for tables). This analysis placed Walmart on the low end of both the
EV/Sales and EV/EBITDA multiples, when compared directly with its most relevant peers,
suggesting undervaluation. In Amazon’s case, when compared to selected peers, it is reasonably
priced when looking at EV/EBITDA and is undervalued when looking at EV/Sales. The EV/Sales
analysis does not account for a company’s ability to generate profit, and can be misleading in this
case given Amazon’s current lack of profits. Amazon may wrongly appear undervalued using this
method since the majority of Amazon’s peers have higher profit margins despite lower sales.
In order to better understand the effect of profitability and growth on these valuations, we have
taken a two-variable approach and charted both Walmart and Amazon with a larger pool of
comparable companies in the graphs below. The first is a graph of Walmart’s and its comparable
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companies’ Enterprise Value (EV) to trailing twelve months (TTM) sales ratio, plotted against its
TTM EBITDA margin. This is a direct comparison between a company’s ability to sell product
and its ability to generate profit. Companies with higher sustainable margins should sell for a
higher price per dollar of sales; by using two variables this approach offers a better benchmark
than simply comparing Walmart’s sales multiple to the average. Walmart is just below the trend
line of its peers signifying a reasonable price point based on this method (see the orange data
point).
Wal-Mart Comparables - EV/Sales to EBITDA Margin
Company Name
Costco Wholesale Corporation
Target Corp.
EBITDA Margin EV/Sales
4.1%
0.6x
10.0%
0.8x
Best Buy Co., Inc.
5.4%
0.3x
PriceSmart Inc.
6.5%
0.9x
METRO AG
3.5%
0.2x
Wumart Stores Inc.
3.7%
0.2x
Olympic Group Corporation
2.4%
0.4x
Companhia Brasileira de Distribuicao
5.7%
0.3x
Dollar General DG US Equity
11.3%
1.2x
Dollar Tree Inc DLRT US Equity
13.6%
2.3x
7.3%
0.5x
Wal-Mart
2.50
2.00
1.50
1.00
0.50
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
The second is a graph of Walmart’s and its comparable companies’ Enterprise Value (EV) to
EBITDA ratio, plotted against its projected five year average analyst projected revenue growth
provided by Bloomberg. This graph directly compares an ability to generate profit with an ability
to grow. Companies with higher expected growth should sell for higher EBITDA multiples; again,
by using two variables this approach is a much better method than simply comparing Walmart’s
EBITDA multiple to the average. Walmart is right on the trend line – again signifying a reasonable
price point (see the orange data point).
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Wal-Mart Comparables - EV/EBITDA to 5 yr Growth
Company Name
5 Yr Growth
Target Corp.
EV/EBITDA
14.6x
7.8%
8.0x
1.8%
Best Buy Co., Inc.
1.5%
4.7x
PriceSmart Inc.
9.3%
13.9x
METRO AG
9.2%
5.4x
Wumart Stores Inc.
8.0%
5.4x
10.00
Olympic Group Corporation
15.8%
15.2x
Companhia Brasileira de Distribuicao
8.00
14.8%
5.4x
9.0%
10.2x
6.00
26.2%
16.9x
4.00
2.2%
6.5x
Costco Wholesale Corporation
Dollar General DG US Equity
Dollar Tree Inc DLRT US Equity
Wal-Mart
18.00
16.00
14.00
12.00
2.00
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
To reiterate, both graphs demonstrate a comparison to peers that shows Walmart’s reasonable
price. We have performed this same analysis with Amazon and its comparable companies as shown
in the two graphs below.
Amazon Comparables - EV/Sales to EBITDA Margin
Company Name
Alphabet Inc.
EBITDA Margin EV/Sales
32.5%
5.9x
20.00
18.00
eBay Inc.
29.9%
2.0x
Facebook, Inc.
43.5%
18.7x
16.00
Yahoo! Inc.
12.9%
5.8x
14.00
Expedia Inc.
13.9%
3.1x
12.00
Netflix, Inc.
5.8%
6.9x
37.2%
8.5x
6.7%
4.1x
8.00
TripAdvisor Inc.
28.2%
8.6x
6.00
MERCADOLIBRE INC
30.9%
7.2x
4.00
ALIBABA GROUP HOLDING-SP ADR
36.3%
15.2x
7.6%
3.0x
2.00
The Priceline Group Inc.
Etsy, Inc.
Amazon.com, Inc.
10.00
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Amazon Comparables - EV/EBITDA to 5 yr Growth
Company Name
Alphabet Inc.
eBay Inc.
5 Yr Growth EV/EBITDA
14.2%
18.7x
5.3%
7.3x
31.3%
42.8x
Yahoo! Inc.
4.0%
60.6x
Expedia Inc.
14.9%
27.2x
Netflix, Inc.
23.4%
120.2x
The Priceline Group Inc.
15.3%
22.8x
Etsy, Inc.
31.1%
224.3x
TripAdvisor Inc.
23.6%
34.0x
MERCADOLIBRE INC
20.2%
23.4x
ALIBABA GROUP HOLDING-SP ADR
18.1%
45.8x
Amazon.com, Inc.
17.9%
42.5x
Facebook, Inc.
250.00
200.00
150.00
100.00
50.00
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
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These two graphs show that Amazon is also reasonably priced in comparison to its most relevant
peers.
In addition to peer-based analyses, we created a discounted cash flow (DCF) model to evaluate the
viability of Walmart’s and Amazon’s current stock prices. Please refer to Appendix B for details.
This analysis shows that there is significant potential upside for Walmart based on low
expectations currently priced into the stock. On the other hand, if Amazon can achieve the high
expectations for sales growth and profit built into its stock price, then the price seems reasonable.
These three analyses show that both companies are reasonably priced based on analyst projections
and expectations.
Walmart and Amazon are in very different stages of company life cycle – Walmart is a mature
company, and Amazon is still growing. Both view profitability as important, but for different
reasons. Walmart’s profitability is key to both increasing share price and providing dividends to
shareholders. Amazon, however, uses operating profits generated from a few business segments
to fund growth through investing in research and development. Profitability “matters” for Walmart
because its investors expect it. Amazon’s investors, however, are more concerned about growth
and building a successful company through execution of real options – for them, traditional
profitability is much less of a short-term concern.
Walmart has paid a quarterly dividend and has recognized positive net income for over 20 years.
Walmart also has a share repurchase program, which increases the value of investors’ shares.
Although it recently announced a significant investment into wages and e-commerce, which will
likely result in lower earnings per share (EPS) in the short-term, Walmart is still projecting positive
earnings. Additionally, these investments will decrease costs related to employee turnover,
improve customer service and brand image, and enhance the “omnichannel” experience. With the
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Real Vision Investment Case Study
current stock price at a three-year low and a P/E ratio lower than industry average, Walmart is a
great value buy. Furthermore, history shows that lower P/E stocks tend to outperform higher P/E
stocks in the long runiv.
As a growth-focused company, Amazon places profits second in priority to revenue and market
share growth and any profits achieved are generally reinvested in the company to fund new growth.
For Amazon, profitability has not yet mattered – historically, stock price has appreciated without
a showing in profitability due to expectations for Amazon’s continued growth. However, in Q3 of
2015 Amazon exceeded expectations by reporting a slight profit when a loss was expected. The
market has realized that Amazon is indeed capable of generating profits and formerly patient
investors will soon begin to expect profitability. If Amazon were to shift its focus to becoming
profitable, it may not be able to innovate and pursue new businesses at the same level. An
expectation of profits is not consistent with Amazon’s current business model and that expectation
could severely impact the growth projections of the company.
Apple is an example of an innovative company that has recently struggled to generate successful
new ideas. Many competitors have entered the market and are competing to develop inventive
products. As competition increases, it will be much more difficult for companies to be first to
market with consistently new and innovative products. However, in Apple’s case, stock price has
continued to grow despite a struggle to introduce innovative products. This price appreciation is
primarily due to the company’s impressive profit margins on key product segments. In contrast to
Apple, Amazon does not have significant profitable segments to drive stock appreciation. If the
company struggles to develop new, innovative, and profitable business segments the stock price
will likely fall.
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Real Vision Investment Case Study
In summary, the financial analysis shows that both companies are reasonably priced based on peer
comparables and current projections. However, the performance assumptions included within the
stock prices are very different for Walmart and Amazon – Walmart’s price accounts for very low
expectations, while Amazon’s expectations are very high. It is much more reasonable to assume
that a company will achieve and exceed low expectations, than that a company will execute with
precision to an extremely high level of expectation. On a risk adjusted basis, Walmart is a better
investment.
Qualitative Analysis
Financial analysis alone is not sufficient to fully consider the value of an investment over a ten
year period. Investors must also consider qualitative factors that could allow or prevent a company
from realizing market projections. As the retail industry has evolved into the internet age, the battle
for online retail dominance has moved to center stage. However, this battle is only a sideshow to
the true issue facing the industry, and store-based retail cannot be ignored. Last year, the global
retailing market was valued at $14.1 trillion, and store-based retailing accounted for an enormous
91% of this valuev.
A.T. Kearney recently explained that while the fight for e-commerce success is justified, “Physical
stores remain the preferred shopping channel and where the most significant value continues to be
created, as customers are able to touch and feel products, be immersed in brand experiences, and
engage with sales associates. Two-thirds of the customers purchasing online use a physical store
either before or after the transaction.”vi To be truly successful in the internet age, companies must
capitalize on physical presence to provide an “omnichannel” experience – a mixture of both online
and brick and mortar shopping. No company is better positioned to provide that experience than
Walmart.
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Walmart has a massive physical footprint – Walmart stores are currently located within 5 miles of
70% of the U.S. populationvii and international stores number 6,256viii. This proximity to customers
is essential for operating in an “omnichannel” environment. Additionally, whether consumers
choose to buy online then pick up their purchases at a physical store location or have those items
home delivered through mail, bike messengers (used in densely populated urban areas), or drones,
physical footprint will greatly simplify any chosen delivery method. Current news has revealed
that Amazon, Google, and Walmart are all planning to test drone delivery. ix Without drone
exclusivity for one company, the company with the furthest physical reach will win – Walmart.
Walmart is investing heavily in e-commerce segments – sales from Walmart.com have consistently
grown over the past five years, and growth is projected to continue. Walmart is also working to
better leverage its aforementioned impressive physical presence to provide better delivery services.
It is currently piloting a similar program called Shipping Pass – a direct competitor to Amazon
Prime that provides free home delivery within 3 days but costs half as much as Amazon’s service.
Though Walmart is best positioned to achieve success in the retail market, one way that Amazon
can turn its ubiquity into profitability is through Amazon Web Services (AWS). AWS is an on
demand delivery of IT resources and applications via the internet with pay-as-you-go pricingx. It
is a cloud computing platform consisting of Software as a Service (SaaS), Platform as a Service
(PaaS), and Infrastructure as a Service (IaaS)xi. In Q3 2015 Amazon reported a 25% profit margin
from their AWS business, with revenues representing ~8% of total sales and a 78% growth over
the prior year’s Q3xii. This segment could provide Amazon with the profitability it has been unable
to achieve in the past. However, cloud computing is continuing to play a larger role throughout the
tech space, and there are many major companies competing for market share. Amazon and
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Microsoft are the clear leaders in this market for the time being, but with Google and other
innovative leaders in the race it is unclear whether or not Amazon can maintain this advantage.
Based on the factors discussed above, Walmart will easily outperform the 3% consensus growth
rate estimate. In the case of a recession, Walmart will outperform the market partly due to its lowcost focus. For example, during the recession of 2007-2009, the S&P 500 fell 38% while
Walmart’s stock price rose 18%xiii. If economy improves, Walmart will do better than analyst
expectations. Even if Walmart only grows at the rate of the economy, global GDP is expected to
grow at approximately 3% through 2016xiv with an additional average 2% increase in inflation per
year based on historical data. Total economic growth is then 5% annually, which is higher than
analyst expectations of 3% growth for Walmart.
Amazon, on the other hand, will find it difficult to achieve 18% average consensus growth over
the next 5 years. This growth rate implies that Amazon’s revenues will more than double from less
than $90 billion in 2014 to $236 billion in 2020. This intensive growth would require Amazon to
either steal substantial market share from existing competitors or create significant new businesses.
This is not reasonable given the fierce competition in the technology sector. For every innovative
idea Amazon develops, Apple, Google, Microsoft, and others will not be far behind.
Conclusion
It is highly unlikely that either Walmart or Amazon will become obsolete in the next 10 years. The
question is not which company will succeed long-term, but rather which company will be a better
long-term investment. Based on our analysis, Walmart is in a much better position to provide a
long-term return from a stockholder’s perspective. Amazon is a risky investment – it is priced to
perfection and would have to execute with absolute precision in order to achieve market
expectations. Walmart, on the other hand, is a highly resilient company with a proven ability to
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understand, gain, and retain customers. Due to its physical presence, history of profitability, and
ability to succeed in an “omnichannel” environment, we maintain the position that Walmart is a
better investment choice to exceed current market expectations and recommend a simple long
position to structure the investment.
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APPENDIX
Appendix A: Comparable Companies Analysis
The Data provided below was obtained from Capital IQ as of October, 30, 2015.
Wal-Mart:
Wal-Mart
Comparable Companies Benchmark (Data pulled from Capital IQ as of 10/30/15)
Costco
Target
Best Buy
Dollar General
Dollar Tree
Enterprise Value/ Enterprise Value/
Total Revenue
EBITDA
0.6x
14.6x
0.8x
8.0x
0.3x
4.7x
1.2x
10.2x
2.3x
16.9x
Mean
Median
High
Low
Wal-Mart
1.0x
0.8x
2.3x
0.3x
10.8x
10.2x
16.9x
4.7x
0.5x
6.5x
P/E Ratio
Enterprise Value
29.4
69,412.7
16.9
58,475.2
14.8
10,184.3
18.1
22,651.7
43.8
22,413.7
11.9
230,701.1
Revenue
116,199.0
73,550.0
40,327.0
19,678.0
9,758.6
EBITDA
4,751.0
7,353.0
2,187.0
2,228.7
1,328.9
Net Income
2,377.0
(901.0)
919.0
1,127.3
311.0
Diluted EPS
5.37
4.57
2.37
3.74
1.50
Shares
437.4
628.4
344.6
294.7
234.7
Share Price
158.12
77.18
35.03
67.77
65.49
Mark Cap
69,162.7
48,502.2
12,070.3
19,969.1
15,371.7
485,621.0
35,267.0
15,493.0
4.79
3,205.9
57.24
183,508.1
Amazon:
Amazon
Comparable Companies Benchmark (Data pulled from Capital IQ as of 10/30/15)
Google
Alibaba
Facebook
Ebay
Yahoo!
Mean
Median
High
Low
Amazon
Enterprise Value/ Enterprise Value/
Total Revenue
EBITDA
6.1x
18.7x
15.2x
45.8x
18.7x
42.8x
2.0x
7.3x
5.8x
60.6x
9.6x
6.1x
18.7x
2.0x
35.0x
42.8x
60.6x
7.3x
3.0x
42.5x
P/E Ratio
Enterprise Value
33.0
435,523.2
21.9
206,110.8
103.6
273,329.1
11.2
35,636.2
138.1
28,900.8
896.5
297,557.1
Revenue
71,763.0
13,532.0
14,640.0
17,705.0
4,948.0
EBITDA
23,305.0
4,497.7
6,384.0
4,889.0
477.1
Net Income
16,408.0
9,820.3
2,738.0
2,271.0
242.2
Diluted EPS
22.32
3.80
0.98
2.48
0.26
Shares
687.7
2,512.4
2,817.5
1,200.7
941.4
Share Price
737.39
83.37
101.97
27.90
35.62
Mark Cap
507,121.7
209,461.1
287,305.1
33,498.2
33,532.3
100,588.0
7,007.0
328.0
0.7
468.8
625.90
293,398.1
Appendix B: Discounted Cash Flow (Perpetuity and Exit Multiple)
Using a Bloomberg Discounted Cash Flow (DCF) model and 5 year revenue projections for each
company, we evaluated the current stock price with the results from the Perpetuity Growth
Method and the Exit Multiple Method. The perpetuity growth method calculates terminal value
by growing the year 5 free cash flows at an assumed constant growth rate. Walmart’s assumed
growth rate is 2%. Amazon’s growth rate is 5.9%. The terminal value is calculated using the
formula below:
FCF5 * (1+g)
Terminal Value =
(r-g)
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The exit multiple method uses a company’s terminal year EBITDA to determine future cash flow
based on comparable companies LTM trading multiples. Walmart’s exit multiple is 10.5x.
Amazon’s exit multiple is 24.9x. Terminal value was determined based on the formula below:
Terminal Value =
EBITDA5 * Exit Multiple
Using the Perpetuity Growth Method and the Exit Multiple Method each company’s DCF was
determined below:
Wal-Mart:
Ticker
WMT
Currency
Trading
Name
Wal-Mart Stores Inc
Data
Adjusted (If available)
Summary Analysis
Input Calculation
Output Analysis
Summary Analysis
In Millions of USD
Jan 10 A
Revenue (Estimate Comparable)
Jan 11 A
469,162
Jan 14 A
476,294
Jan 15 A
485,651
Jan 16 E
485,126
Jan 17 E
497,700
Jan 18 E
512,287
Jan 19 E
528,383
Jan 20 E
543,576
Jan 21 E
3%
6%
5%
2%
2%
0%
3%
3%
3%
3%
7%
31,419
33,183
34,872
36,338
36,752
36,569
34,079
34,644
35,644
36,685
38,446
39,472
% Ma rgi n
Free Cash Flow
446,950
Jan 13 A
421,849
% YoY Growth
EBITDA
Jan 12 A
408,214
8%
8%
8%
8%
8%
8%
7%
7%
7%
7%
7%
7%
14,913
10,428
13,396
13,970
11,271
17,435
12,409
13,012
13,625
14,469
16,387
16,733
4%
2%
3%
3%
2%
4%
3%
3%
3%
3%
3%
3%
% Ma rgi n
Perpetuity Growth Method
Trend
582,802
EBITDA Multiple Method
Current Pri ce (USD)
58.78
Current Pri ce (USD)
Cons ens us Pri ce Ta rget
62.48
Cons ens us Pri ce Ta rget
DCF Estimated Value per Share (USD)
134.24
DCF Estimated Upside
128%
58.78
62.48
DCF Estimated Value per Share (USD)
105.47
DCF Estimated Upside
79%
Perpetui ty Growth
Termi na l EBITDA Mul tipl e
1.0%
1.5%
2.0%
2.5%
3.0%
7.5x
9.0x
4.2%
139.70
165.20
202.29
261.19
369.19
10.5x
12.0x
13.5x
4.2%
80.96
95.90
110.84
125.79
140.73
Di s count
4.7%
118.69
136.94
161.96
198.34
256.13
Ra te
5.2%
102.69
116.33
134.24
158.79
194.48
Di s count
4.7%
78.94
93.53
108.12
122.71
137.30
Ra te
5.2%
76.98
91.22
105.47
119.72
(WACC)
5.7%
90.11
100.65
114.04
131.61
155.69
133.96
(WACC)
5.7%
75.07
88.98
102.90
116.81
6.2%
79.95
88.31
98.65
111.79
129.03
130.72
6.2%
73.21
86.80
100.39
113.98
1.0%
1.5%
2.0%
2.5%
3.0%
127.57
7.5x
9.0x
10.5x
12.0x
4.2%
138%
181%
244%
344%
528%
13.5x
4.2%
38%
63%
89%
114%
4.7%
102%
133%
176%
237%
139%
336%
4.7%
34%
59%
84%
109%
5.2%
75%
98%
128%
134%
170%
231%
5.2%
31%
55%
79%
104%
5.7%
53%
71%
128%
94%
124%
165%
5.7%
28%
51%
75%
99%
6.2%
36%
50%
122%
68%
90%
120%
6.2%
25%
48%
71%
94%
117%
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Input Calculation
Input
Weighted Average Cost of Capital
Peers
5.2%
Px Implied Tgt Implied
8.7%
Perpetuity Growth Rate
Exit Enterprise Value / EBITDA
In Millions of USD
Jan 10 A
Revenue (Estimate Comparable)
% YoY Growth
10.5x NA
% Ma rgi n
% of Revenue
% of Revenue
512,287
Jan 19 E
528,383
Jan 20 E
543,576
Jan 21 E
2%
0%
3%
3%
3%
3%
7%
365,086
367,473
377,317
388,390
400,673
411,487
442,930
75%
75%
75%
75%
75%
75%
76%
76%
76%
76%
76%
76%
106,562
111,823
116,674
118,225
120,565
117,653
120,384
123,897
127,710
132,089
139,872
25%
25%
25%
25%
25%
25%
24%
24%
24%
24%
24%
24%
79,379
81,020
85,081
88,837
90,343
93,169
92,493
94,891
97,672
100,741
103,637
111,116
19%
19%
19%
19%
19%
19%
19%
19%
19%
19%
19%
19%
2%
5%
4%
2%
3%
-1%
3%
3%
3%
3%
7%
25,542
26,742
27,837
27,882
27,396
25,159
25,493
26,225
26,969
28,452
28,756
6%
6%
6%
6%
6%
6%
5%
5%
5%
5%
5%
5%
8,268
8,695
8,709
8,634
9,189
8,829
8,192
8,301
8,539
8,782
9,264
9,364
34%
34%
33%
31%
33%
32%
33%
33%
33%
33%
33%
33%
15,994
16,847
18,033
19,203
18,693
18,567
16,967
17,192
17,686
18,188
19,187
19,393
4%
4%
4%
4%
4%
4%
3%
3%
3%
3%
4%
3%
7,157
7,641
8,130
8,501
8,870
9,173
8,920
9,151
9,419
9,715
9,995
10,716
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
7%
6%
5%
4%
3%
-3%
3%
3%
3%
3%
7%
12,184
12,699
13,510
12,898
13,115
12,174
12,879
12,915
12,796
12,776
12,708
12,815
3%
3%
3%
3%
3%
3%
3%
3%
2%
2%
2%
2%
4%
6%
-5%
2%
-7%
6%
0%
-1%
0%
-1%
1%
2,535
437
587
3,581
(1,081)
1,313
1,018
1,157
1,300
788
1,273
Edit Row
(4,452)
-1%
1%
0%
0%
1%
0%
0%
0%
0%
0%
0%
0%
(+) Cha nges i n Net Long Term Deferred Ta x Li a bi l i ti es (506)
1,174
1,180
(249)
404
788
714
602
474
642
701
713
0%
0%
0%
0%
0%
% of Revenue
Edit Row
Edit Row
0%
(+) Other Us er Es ti ma ted Non-Ca s h Adjus tments
% of Revenue
Edit Row
(=) Free Cash Flow
% Ma rgi n
0%
-
0%
-
0%
0%
0%
0%
0%
0%
13,970
11,271
17,435
12,409
13,012
13,625
14,469
16,387
16,733
4%
2%
3%
3%
2%
4%
3%
3%
3%
3%
3%
3%
-30%
28%
4%
-19%
55%
-29%
5%
5%
6%
13%
2%
23%
100%
100%
100%
100%
77%
0.12
0.73
1.73
2.73
3.73
4.62
Peri od for Di s count Fa ctor (Mi d-Yea r Conventi on)
Di s count Fa ctor @ 5.2% WACC
Present Value of Free Cash Flow (5 Years)
% YoY Growth
0%
-
13,396
% of the Free Ca s h Fl ow to be di s counted
Edit Row
0%
-
10,428
% YoY Growth
% Ma rgi n
0%
-
14,913
Edit Row
EBITDA
0%
-
Year 5
582,802
103,641
% YoY Growth
% of Revenue
497,700
Jan 18 E
2%
Edit Row
(-) Cha nges i n Net Worki ng Ca pi ta l
485,126
Jan 17 E
358,069
% YoY Growth
(-) Ca pi ta l Expendi ture
485,651
Jan 16 E
5%
% Ma rgi n
% of Revenue
476,294
Jan 15 A
352,488
Edit Row
(+) Depreci a ti on & Amorti za ti on
Jan 14 A
2.0% (Perpetui ty Growth Method onl y)
10.5x (EBITDA Mul ti pl e Method onl y)
6%
% Ma rgi n
% Ta x Ra te
7.9x
335,127
24,262
(=) NOPAT
6.0x
3%
Edit Row
(-) Ta x on Opera ti ng Income
469,162
5.6x
5.2%
315,287
% YoY Growth
(=) Operating Income
Jan 13 A
2.0%
304,444
Edit Row
(-) Opera ti ng Expens es /Income
446,950
-1.8%
421,849
% of Revenue
(=) Gross Profit
Jan 12 A
6.8%
-2.2%
Current
Choice
408,214
Edit Row
(-) Cos t of Revenue
Jan 11 A
Default
0.99
0.96
0.92
0.87
0.83
0.79
2,873
12,538
12,479
12,597
13,562
10,158
31,419
33,183
34,872
36,338
36,752
36,569
34,079
34,644
35,644
36,685
38,446
39,472
8%
8%
8%
8%
8%
8%
7%
7%
7%
7%
7%
7%
6%
5%
4%
1%
0%
-7%
2%
3%
3%
5%
3%
16,653
39,233
14
MBA Case Competition 2016
Real Vision Investment Case Study
Output Analysis
Perpetuity Growth Method - Value per Share
EBITDA Multiple Method - Value per Share
16,653
Free Ca s h Fl ow a t Yea r 5
39,233
Termi na l EBITDA a t Yea r 5
WACC
5.2%
WACC
Perpetui ty Growth Ra te
2.0%
Exi t Enterpri s e Va l ue / EBITDA
530,803
Perpetui ty Va l ue a t End of Yea r 5
Pres ent Va l ue of Perpetui ty (@ 5.2% WACC)
(+) Pres ent Va l ue of Free Ca s h Fl ows (@ 5.2% WACC)
411,959
Pres ent Va l ue of Termi na l Va l ue (@ 5.2% WACC)
64,207
(+) Pres ent Va l ue of Free Ca s h Fl ows (@ 5.2% WACC)
4,543
3,206
Sha res outs ta ndi ng
58.78
Current Pri ce (USD)
128%
79%
Estimated Upside
Perpetuity Growth Method - Sensitivity Analysis
EBITDA Multiple Method - Sensitivity Analysis
Enterprise Value in Millions of USD
Incrementa l cha nge
105.47
Estimated Value per Share (USD)
58.78
Estimated Upside
338,134
(=) Equi ty Va l ue
134.24
Current Pri ce (USD)
4,543
(-) Current Preferred a nd Mi nori ty Interes t
3,206
Sha res outs ta ndi ng
Estimated Value per Share (USD)
41,246
(-) Current Net Debt
430,377
(=) Equi ty Va l ue
9,135
(-) Ca s h a nd Ma rketa bl e Securi ti es
41,246
(-) Current Preferred a nd Mi nori ty Interes t
6,689
43,692
(+) Long Term Debt
9,135
(-) Ca s h a nd Ma rketa bl e Securi ti es
Enterprise Value in Millions of USD
Incrementa l cha nge
Perpetui ty Growth
0.5%
1.5x
1.0%
1.5%
2.0%
2.5%
4.2%
493,664
575,410
694,314
883,161
1,229,381
Di s count
4.7%
426,291
484,813
565,008
681,657
866,923
Ra te
5.2%
375,004
418,750
476,166
554,849
(WACC)
5.7%
334,666
368,457
411,381
6.2%
302,118
328,901
362,060
1.0%
1.5%
Termi na l EBITDA Mul ti pl e
0.5%
3.0%
7.5x
9.0x
10.5x
12.0x
13.5x
4.2%
305,329
353,237
401,145
449,053
496,961
Di s count
4.7%
298,864
345,639
392,414
439,189
485,964
669,295
Ra te
5.2%
292,576
338,250
383,923
429,597
475,271
467,719
544,923
(WACC)
5.7%
286,458
331,062
375,665
420,269
464,873
404,182
459,466
6.2%
280,506
324,069
367,633
411,196
454,760
2.5%
3.0%
7.5x
9.0x
12.0x
13.5x
Value in USD
2.0%
64,207
383,923.3
Short Term Debt
43,692
(-) Current Net Debt
319,716
(=) Current Enterprise Value
6,689
Short Term Debt
(+) Long Term Debt
411,949
Termi na l Va l ue a t End of Yea r 5
476,166
(=) Current Enterprise Value
5.2%
10.5x
Value in USD
10.5x
4.2%
139.70
165.20
202.29
261.19
369.19
4.2%
80.96
95.90
110.84
125.79
140.73
4.7%
118.69
136.94
161.96
198.34
256.13
4.7%
78.94
93.53
108.12
122.71
137.30
5.2%
102.69
116.33
134.24
158.79
194.48
5.2%
76.98
91.22
105.47
119.72
133.96
5.7%
90.11
100.65
114.04
131.61
155.69
5.7%
75.07
88.98
102.90
116.81
130.72
6.2%
79.95
88.31
98.65
111.79
129.03
6.2%
73.21
86.80
100.39
113.98
127.57
Upside Potential
Upside Potential
1.0%
1.5%
2.0%
2.5%
3.0%
7.5x
9.0x
4.2%
138%
181%
244%
344%
528%
10.5x
12.0x
13.5x
4.2%
38%
63%
89%
114%
4.7%
102%
133%
176%
237%
139%
336%
4.7%
34%
59%
84%
109%
5.2%
75%
98%
128%
134%
170%
231%
5.2%
31%
55%
79%
104%
5.7%
53%
71%
128%
94%
124%
165%
5.7%
28%
51%
75%
99%
6.2%
36%
50%
122%
68%
90%
120%
6.2%
25%
48%
71%
94%
117%
7.5x
9.0x
Implied Exit EV / EBITDA Multiple
1.0%
1.5%
2.0%
2.5%
Implied Perpetuity Growth
3.0%
10.5x
12.0x
13.5x
4.2%
13.40
15.96
19.68
25.59
36.43
4.2%
-1.4%
-0.5%
0.2%
0.6%
1.0%
4.7%
11.59
13.46
16.03
19.78
25.72
4.7%
-0.9%
0.0%
0.6%
1.1%
1.5%
5.2%
10.21
11.64
13.53
16.11
19.87
5.2%
-0.4%
0.5%
1.1%
1.6%
2.0%
5.7%
9.12
10.26
11.70
13.60
16.19
5.7%
0.0%
0.9%
1.6%
2.1%
2.5%
6.2%
8.24
9.17
10.31
11.76
13.66
6.2%
0.5%
1.4%
2.1%
2.6%
3.0%
15
MBA Case Competition 2016
Real Vision Investment Case Study
Amazon:
Ticker
AMZN
Currency
Trading
Name
Amazon.com Inc
Data
Adjusted (If available)
Summary Analysis
Input Calculation
Output Analysis
Summary Analysis
In Millions of USD
Dec 09 A
Revenue (Estimate Comparable)
Dec 10 A
24,509
34,204
1,558
1,974
% YoY Growth
Dec 11 A
48,077
40%
EBITDA
% Margin
6%
Free Cash Flow
2,511
% Margin
10%
61,093
41%
1,945
6%
2,032
Dec 12 A
27%
2,910
4%
5%
1,155
6%
157
2%
0%
Dec 13 A
74,452
22%
4,010
Dec 14 A
88,988
107,112
20%
5,168
6%
129,399
3,239
0%
155,808
Dec 18 E
179,973
20%
9,306
6%
4,127
3%
Perpetuity Growth Method
Dec 17 E
21%
7,153
5%
349
2%
Dec 16 E
20%
5,094
5%
1,528
Dec 15 E
206,080
16%
12,446
6%
7,106
3%
Dec 20 E
15%
24,726
9%
11,413
4%
Trend
236,030
15%
18,903
7%
5,273
3%
Dec 19 E
10%
15,323
6%
6%
EBITDA Multiple Method
Current Price (USD)
659.37
Current Price (USD)
659.37
Consensus Price Target
725.11
Consensus Price Target
725.11
DCF Estimated Value per Share (USD)
507.38
DCF Estimated Value per Share (USD)
838.75
DCF Estimated Upside
-23%
DCF Estimated Upside
27%
Perpetuity Growth
Terminal EBITDA Multiple
4.9%
5.4%
5.9%
6.4%
6.9%
21.9x
23.4x
9.5%
525.28
583.28
657.39
755.42
891.14
24.9x
26.4x
27.9x
9.5%
779.38
827.89
876.40
924.91
973.42
Discount
10.0%
470.44
516.23
573.19
645.96
742.22
Rate
10.5%
425.48
462.42
507.38
563.31
634.78
Discount
10.0%
762.49
809.91
857.32
904.74
952.16
Rate
10.5%
746.05
792.40
838.75
885.11
(WACC)
11.0%
387.97
418.30
454.57
498.73
553.66
931.46
(WACC)
11.0%
730.04
775.36
820.68
865.99
11.5%
356.20
381.48
411.27
446.89
490.27
911.31
11.5%
714.45
758.76
803.07
847.39
4.9%
5.4%
5.9%
6.4%
6.9%
891.70
21.9x
23.4x
24.9x
26.4x
9.5%
-20%
-12%
0%
15%
35%
27.9x
9.5%
18%
26%
33%
40%
10.0%
-29%
-22%
-13%
-2%
48%
13%
10.0%
16%
23%
30%
37%
10.5%
-35%
-30%
-23%
44%
-15%
-4%
10.5%
13%
20%
27%
34%
11.0%
-41%
-37%
41%
-31%
-24%
-16%
11.0%
11%
18%
24%
31%
11.5%
-46%
-42%
38%
-38%
-32%
-26%
11.5%
8%
15%
22%
29%
35%
16
MBA Case Competition 2016
Real Vision Investment Case Study
Input Calculation
Input
Weighted Average Cost of Capital
Peers
10.5%
Px Implied
In Millions of USD
Dec 09 A
Revenue (Estimate Comparable)
% YoY Growth
% of Revenue
Edit Row
% of Revenue
Edit Row
% Margin
% Tax Rate
20%
21%
20%
16%
15%
15%
86,698
102,833
118,782
136,013
153,420
% Margin
% of Revenue
Edit Row
% of Revenue
Edit Row
67%
42,702
66%
52,975
66%
61,191
66%
70,067
65%
82,611
22%
22%
25%
27%
30%
32%
33%
34%
34%
34%
35%
6,237
9,927
14,371
19,514
26,058
33,392
40,725
49,901
55,944
59,408
67,326
18%
18%
21%
24%
26%
29%
31%
31%
32%
31%
29%
29%
43%
59%
45%
36%
34%
28%
22%
23%
12%
6%
862
751
757
348
884
22%
1,406
4%
330
24%
1,076
2%
268
1%
435
1%
235
0%
1,977
1%
1,336
292
31%
58%
31%
384%
33%
594
316
522
(988)
592
3,074
2%
652
33%
1,324
5,247
2%
1,014
33%
2,060
10,659
3%
1,732
33%
3,516
13%
15,285
5%
3,518
33%
7,142
6%
5,044
33%
10,241
4%
3%
1%
1%
1%
-1%
1%
1%
1%
2%
3%
4%
378
568
1,083
2,159
3,253
4,746
4,284
5,176
6,232
7,199
8,243
9,441
2%
2%
2%
4%
4%
5%
4%
4%
4%
4%
4%
4%
50%
91%
99%
51%
46%
-10%
21%
20%
16%
15%
15%
373
979
1,811
3,785
3,444
4,893
4,284
5,176
6,232
7,199
8,243
9,441
2%
3%
4%
6%
5%
5%
4%
4%
4%
4%
4%
4%
162%
85%
109%
-9%
42%
-12%
21%
20%
16%
15%
15%
% YoY Growth
(-) Changes in Net Working Capital
68%
34,276
(1,607)
(1,371)
(1,295)
(1,562)
(1,074)
(1,484)
(2,650)
(2,804)
(3,212)
(3,532)
(4,259)
(5,066)
Edit Row
-7%
-4%
-3%
-3%
-1%
-2%
-2%
-2%
-2%
-2%
-2%
-2%
(+) Changes in Net Long Term Deferred Tax Liabilities
(18)
(4)
(6)
(95)
123
-
1
2
58
12
17
0%
0%
0%
0%
0%
0%
0%
0%
0%
% of Revenue
% of Revenue
Edit Row
0%
(+) Other User Estimated Non-Cash Adjustments
% of Revenue
% Margin
0%
2,511
Edit Row
0%
-
Edit Row
(=) Free Cash Flow
3 -
10%
% YoY Growth
2,032
1,155
157
1,528
349
3,239
0%
4,127
0%
5,273
0%
7,106
0%
-
0%
11,413
0%
15,323
6%
2%
0%
2%
0%
3%
3%
3%
4%
6%
6%
-19%
-43%
-86%
870%
-77%
828%
27%
28%
35%
61%
34%
15%
100%
100%
100%
100%
0.65
1.65
2.65
3.65
% of the Free Cash Flow to be discounted
0.07
Discount Factor @ 10.5% WACC
0.99
0.94
0.85
0.77
0.69
0.63
Present Value of Free Cash Flow (5 Years)
476
3,868
4,473
5,455
7,929
8,269
% Margin
% YoY Growth
Edit Row
14,744.63
85%
Period for Discount Factor (Mid-Year Convention)
EBITDA
Year 5
236,030
23%
% YoY Growth
(-) Capital Expenditure
70%
26,406
206,080
4,351
917
(+) Depreciation & Amortization
73%
179,973
Dec 20 E
72,836
20,271
155,808
Dec 19 E
20%
75%
129,399
Dec 18 E
62,582
15,122
107,112
Dec 17 E
22%
78%
88,988
Dec 16 E
54,181
5%
Edit Row
Dec 15 E
27%
10,789
74,452
Dec 14 A
45,971
263
(=) NOPAT
Dec 13 A
5.9% (Perpetuity Growth Method only)
24.9x (EBITDA Multiple Method only)
41%
1,180
(-) Tax on Operating Income
30.8x
37,288
78%
61,093
21.3x
40%
% YoY Growth
(=) Operating Income
Dec 12 A
19.1x
10.5%
26,561
7,643
48,077
5.9%
18,978
5,531
(-) Operating Expenses/Income
Dec 11 A
7.4%
34,204
77%
(=) Gross Profit
Dec 10 A
24.9x
8.8%
7.0%
24,509
Edit Row
(-) Cost of Revenue
% Margin
24.9x
Current
Choice
Default
9.2%
Perpetuity Growth Rate
Exit Enterprise Value / EBITDA
Tgt Implied
4.57
1,558
1,974
1,945
2,910
4,010
5,094
5,168
7,153
9,306
12,446
18,903
24,726
6%
6%
4%
5%
5%
6%
5%
6%
6%
7%
9%
10%
27%
-1%
50%
38%
27%
1%
38%
30%
34%
52%
31%
23,864.36
17
MBA Case Competition 2016
Real Vision Investment Case Study
Output Analysis
Perpetuity Growth Method - Value per Share
EBITDA Multiple Method - Value per Share
14,745
Free Cash Flow at Year 5
10.5%
WACC
24.9x
Exit Enterprise Value / EBITDA
339,447
Perpetuity Value at End of Year 5
10.5%
WACC
5.9%
Perpetuity Growth Rate
23,864
Terminal EBITDA at Year 5
595,351
Terminal Value at End of Year 5
Present Value of Perpetuity (@ 10.5% WACC)
206,044
Present Value of Terminal Value (@ 10.5% WACC)
(+) Present Value of Free Cash Flows (@ 10.5% WACC)
30,470
(+) Present Value of Free Cash Flows (@ 10.5% WACC)
236,515
(=) Current Enterprise Value
12,489
(-) Cash and Marketable Securities
17,416
(-) Cash and Marketable Securities
17,416
(1,327)
393,176
(=) Equity Value
469
Shares outstanding
12,489
(-) Current Preferred and Minority Interest
237,842
(=) Equity Value
(+) Long Term Debt
(-) Current Net Debt
-
(-) Current Preferred and Minority Interest
3,600
Short Term Debt
(1,327)
(-) Current Net Debt
30,470
391,848.7
(=) Current Enterprise Value
3,600
Short Term Debt
(+) Long Term Debt
361,378
469
Shares outstanding
Estimated Value per Share (USD)
507.38
Estimated Value per Share (USD)
838.75
Current Price (USD)
659.37
Current Price (USD)
659.37
-23%
Estimated Upside
27%
Estimated Upside
Perpetuity Growth Method - Sensitivity Analysis
EBITDA Multiple Method - Sensitivity Analysis
Enterprise Value in Millions of USD
Incremental change
Enterprise Value in Millions of USD
Incremental change
Perpetuity Growth
0.5%
1.5x
4.9%
5.4%
5.9%
6.4%
6.9%
9.5%
244,902
272,092
306,835
352,785
416,407
Discount
10.0%
219,198
240,662
267,361
301,476
346,596
Rate
10.5%
198,123
215,437
236,515
262,734
(WACC)
11.0%
180,538
194,754
211,758
11.5%
165,648
177,496
191,459
4.9%
5.4%
Terminal EBITDA Multiple
0.5%
21.9x
23.4x
24.9x
27.9x
364,018
386,757
409,496
432,235
454,974
Discount
10.0%
356,100
378,327
400,553
422,780
445,007
296,235
Rate
10.5%
348,392
370,120
391,849
413,577
435,306
232,459
258,208
(WACC)
11.0%
340,888
362,131
383,375
404,618
425,862
208,160
228,492
11.5%
333,581
354,353
375,124
395,895
416,667
6.4%
6.9%
Value in USD
5.9%
26.4x
9.5%
Value in USD
21.9x
23.4x
24.9x
26.4x
27.9x
9.5%
525.28
583.28
657.39
755.42
891.14
9.5%
779.38
827.89
876.40
924.91
973.42
10.0%
470.44
516.23
573.19
645.96
742.22
10.0%
762.49
809.91
857.32
904.74
952.16
10.5%
425.48
462.42
507.38
563.31
634.78
10.5%
746.05
792.40
838.75
885.11
931.46
11.0%
387.97
418.30
454.57
498.73
553.66
11.0%
730.04
775.36
820.68
865.99
911.31
11.5%
356.20
381.48
411.27
446.89
490.27
11.5%
714.45
758.76
803.07
847.39
891.70
Upside Potential
Upside Potential
4.9%
5.4%
5.9%
6.4%
6.9%
21.9x
23.4x
9.5%
-20%
-12%
0%
15%
35%
24.9x
26.4x
27.9x
9.5%
18%
26%
33%
40%
10.0%
-29%
-22%
-13%
-2%
48%
13%
10.0%
16%
23%
30%
37%
10.5%
-35%
-30%
-23%
44%
-15%
-4%
10.5%
13%
20%
27%
34%
11.0%
-41%
-37%
41%
-31%
-24%
-16%
11.0%
11%
18%
24%
31%
11.5%
-46%
-42%
38%
-38%
-32%
-26%
11.5%
8%
15%
22%
29%
35%
21.9x
23.4x
Implied Exit EV / EBITDA Multiple
4.9%
5.4%
5.9%
6.4%
Implied Perpetuity Growth
6.9%
24.9x
26.4x
27.9x
9.5%
14.09
15.88
18.18
21.21
25.40
9.5%
6.5%
6.7%
6.9%
7.0%
7.1%
10.0%
12.71
14.16
15.96
18.26
21.31
10.0%
7.0%
7.2%
7.3%
7.5%
7.6%
10.5%
11.57
12.77
14.22
16.03
18.35
10.5%
7.5%
7.7%
7.8%
8.0%
8.1%
11.0%
10.63
11.63
12.83
14.29
16.11
11.0%
8.0%
8.2%
8.3%
8.5%
8.6%
11.5%
9.82
10.68
11.68
12.89
14.36
11.5%
8.4%
8.6%
8.8%
9.0%
9.1%
DCF Inputs: Weighted Average Cost of Capital
In order to calculate a Weighted Average Cost of Capital (WACC) for each of the two
companies, we calculated the Cost of Equity and Cost of Debt as shown below, and weighted
those based on the percentage of debt and equity with each company. The formula’s for
calculating each are as follows:
Cost of Equity = Risk Free Rate + Beta * (Expected Market Return – Risk Free Rate)
18
MBA Case Competition 2016
Real Vision Investment Case Study
Cost of Debt = Total Debt * (1 – Effective Tax Rate) * Bond Yield
The Risk Free Rate used is based on the current 10 year Treasury Yieldxv. The Beta is derived
by comparing the weekly performance of the company’s stock to that of the S&P over the past
five years. We used the raw beta in the calculation because it has not been modified from the
historical data. The Expected Market Return is provided by Bloomberg and consistent across all
companies within the market.
For the cost of debt we used a reasonable tax rate based on historical averages. We used the 10
year US Corporate Bond yield for a bond rating of AAxvi (Walmart is AA, and Amazon is AA-)
for both short term and long term debt. The long term yield is used as a proxy for a series of
short term loans. No debt adjustment factor was used.
WACC Inputs – Wal-Mart:
19
MBA Case Competition 2016
Real Vision Investment Case Study
WACC Inputs – Amazon:
i
Walmart Locations - http://corporate.walmart.com/our-story/our-locations
Bloomberg – financial analysis data on Walmart
iii
Yahoo Finance
iv
The 8 Rules of Dividend Investing - http://www.suredividend.com/8rules/
v
EuroMonitor Retailing Industry - http://www.portal.euromonitor.com.erl.lib.byu.edu/portal/magazine/homemain
vi
Global Retail E-Commerce Keeps on Clicking https://www.atkearney.com/consumer-products-retail/e-commerceindex/full-report/-/asset_publisher/87xbENNHPZ3D/content/global-retail-e-commerce-keeps-onclicking/10192?_101_INSTANCE_87xbENNHPZ3D_redirect=%2Fconsumer-products-retail%2Fe-commerceindex
vii
Reuters http://www.reuters.com/article/2015/10/27/us-wal-mart-stores-drones-exclusiveidUSKCN0SK2IQ20151027
viii
Walmart Locations - http://corporate.walmart.com/our-story/our-locations
ix
Tech Times – The Drone Delivery Race Begins - http://www.techtimes.com/articles/103406/20151105/the-dronedelivery-race-begins-%E2%80%93-google-amazon-bestbuy-and-wal-mart-all-want-to-deliver-to-your-doorstep-viadrone.htm
x
Amazon.com https://aws.amazon.com/what-is-cloud-computing/
xi
Rackspace http://www.rackspace.com/knowledge_center/whitepaper/understanding-the-cloud-computing-stacksaas-paas-iaas
xii
Amazon.com Press Release http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irolnewsArticle&ID=2100418
xiii
Sure Dividend - http://www.suredividend.com/wal-mart-wmt-is-deeply-undervalued/
xiv
IMF Projections - http://www.imf.org/external/pubs/ft/survey/so/2015/RES100615A.htm
xv
Treasury Yields - http://www.treasury.gov/resource-center/data-chart-center/interestrates/Pages/TextView.aspx?data=yield
xvi
US Corporate Bond Yields - http://www.bondsonline.com/Todays_Market/Composite_Bond_Yields_table.php
ii
20