BMGT 443 Lecture Notes - Lecture 6: Whole Foods Market, 6 Years, Walmart

• School: University of Maryland
• Department: Business and Management
• Course: BMGT 443
• Professor: Joseph Perfetti

Document Summary

Current share price (as of sunday, april 3rd): . 52. Industry: supermarkets & grocery stores in the us (ibisworld industry report 44511) Tax rate: 40% seemed like an appropriate tax rate because over the past 6 years of data the actual tax rate fluctuated between 38. 5% and 41% with an average of 39. 3%. In the end i assumed, while still cyclical, a much tighter revenue growth pattern resulting in a 5. 5% terminal revenue growth rate. Ebitda: wfm had historical ebitda within a range of 1. 6% so at first i put in ebitda of 8% for. 2018 through the terminal year, because this was lower than every year except one of the historical 5-year data. After seeing the lack of a major change after changing the revenue growth rate, and it seemed beyond ridiculous to alter the tax rate, i changed the terminal. Ebitda value to 7. 45% which brought the stock price within $. 03 of the actual stock price.