1. Please comment on the trend in General Motors's operating income over the past five years.

2. Please remember that Beta is a measure of risk that consequently drives the cost of equity number and the weighted average cost of capital. Please review General Motors's beta and comment on whether you believe this to be an accurate representation of General Motors's risk.

3. Review the market weights of debt and equity for General Motors relative the others in the industry. Is this level of debt too high, too low, misrepresented? Why?

4- List and describe something that is unique to General Motors that you believe has value? ( Please provide resources "References")

Thank you

2019 137,237 123,265 8,491 5,481 5,481 2020 122,485 107,313 8,538 6,634 6,634 General Motors Income Statement: Year 2016 2017 2018 Total Revenue 149,184 145,588 147,049 Cost of Revenue, Total 130,153 127,357 132,954 Selling, General and Other expense 10,345 9,570 9,650 Operating Income 8,686 8,661 4,445 8,686 8,661 4,445 Given information for General Motors: Cost of debt General Motors (from the footnotes to the financial statements) Beta for General Motors (from Yahoo or other financial sources) Normalized risk free rate of return in the market (observing the 10 rate on government issued securities) Equity risk premium (from historical studies of the market) Market value of debt (use book or amount disclosed in the footnotes if different) Number of common shares outstanding Market price of the common stock Market value of equity (number of shares times the stock price) 3.59% 1.36 2.50% 5.00% 114,774 1,450 58.84 85,318 $ $ $ Weights Calculate the required return (weighted average cost of capital) Market Values Debt $ 114,774 Equity $ 85,318 $ 200,092 Required return (weighted average cost of capital). Component Cost 3.59% 9.30% 57% 43% Weighted Cost 2.06% 3.97% 6.02% Calculate the Economic Profit (Economic Value Added) Net Operating Assets $ 172,464 $ 168,070 $ 180,902 $ 183,766 $ 195,329 times the required return 6.02% 6.02% 6.02% 6.02% 6.02% Required income in dollars $ 10,390 $ 10,126 $ 10,899 $ 11,071 $ 11,768 Year 2016 2018 Operating Income earned Less required income Economic profit or (loss) $ $ $ 8,686 $ 10,390 $ (1,704) $ 2017 8,661 $ 10,126 (1,465) $ 4,445 $ 10,899 $ (6,454) $ 2019 5,481 $ 11,071 $ (5,590) $ 2020 6,634 11,768 (5,134) Another way to look at this: Return on invested capital Weighted average cost of capital Spread 5.04% 6.02% -0.99% 5.15% 6.02% -0.87% 2.46% 6.02% -3.57% 2.98% 6.02% -3.04% 3.40% 6.02% -2.63% 2019 137,237 123,265 8,491 5,481 5,481 2020 122,485 107,313 8,538 6,634 6,634 General Motors Income Statement: Year 2016 2017 2018 Total Revenue 149,184 145,588 147,049 Cost of Revenue, Total 130,153 127,357 132,954 Selling, General and Other expense 10,345 9,570 9,650 Operating Income 8,686 8,661 4,445 8,686 8,661 4,445 Given information for General Motors: Cost of debt General Motors (from the footnotes to the financial statements) Beta for General Motors (from Yahoo or other financial sources) Normalized risk free rate of return in the market (observing the 10 rate on government issued securities) Equity risk premium (from historical studies of the market) Market value of debt (use book or amount disclosed in the footnotes if different) Number of common shares outstanding Market price of the common stock Market value of equity (number of shares times the stock price) 3.59% 1.36 2.50% 5.00% 114,774 1,450 58.84 85,318 $ $ $ Weights Calculate the required return (weighted average cost of capital) Market Values Debt $ 114,774 Equity $ 85,318 $ 200,092 Required return (weighted average cost of capital). Component Cost 3.59% 9.30% 57% 43% Weighted Cost 2.06% 3.97% 6.02% Calculate the Economic Profit (Economic Value Added) Net Operating Assets $ 172,464 $ 168,070 $ 180,902 $ 183,766 $ 195,329 times the required return 6.02% 6.02% 6.02% 6.02% 6.02% Required income in dollars $ 10,390 $ 10,126 $ 10,899 $ 11,071 $ 11,768 Year 2016 2018 Operating Income earned Less required income Economic profit or (loss) $ $ $ 8,686 $ 10,390 $ (1,704) $ 2017 8,661 $ 10,126 (1,465) $ 4,445 $ 10,899 $ (6,454) $ 2019 5,481 $ 11,071 $ (5,590) $ 2020 6,634 11,768 (5,134) Another way to look at this: Return on invested capital Weighted average cost of capital Spread 5.04% 6.02% -0.99% 5.15% 6.02% -0.87% 2.46% 6.02% -3.57% 2.98% 6.02% -3.04% 3.40% 6.02% -2.63%