Question
Please review the financial economic profit calculation you completed in the Week 2 Practice Set to answer the next four questions: 1. Please comment on
Please review the financial economic profit calculation you completed in the Week 2 Practice Set to answer the next four questions:
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. Review General Motors's economic profit trend for the five years. Is this trending in the right direction, too high, too low, misrepresented because of some factor? How or why? 5. Remember strengths are internal to the firm and are attributes that allow positive net present value enhancing projects in the future. What do you believe to be General Motors's biggest internal strength? Why? 6. Weaknesses are also internal to the firm and are things that threaten the profitability or survival of the firm. What do you believe to be General Motors's greatest weakness Why? 7. Wealth creating opportunities are external to the firm. Using what you learned in your prior courses, in the areas of product, supply chain management, human capital, or finance, what single opportunity does General Motors have that you believe will add the greatest wealth for General Motors shareholders in the future? Why? 8. Rewording the prior question, what single opportunity does General Motors have that you believe will add the greatest benefit for another (non-stockholder) stakeholder group in the future? Please name the stakeholder group and explain the opportunity and why? 9. Threats are also external to the firm. Using what you learned in your prior courses, in the areas of product, supply chain management, human capital, or finance, what single threat does General Motors face that you believe could impact the financials of the firm or possibly the survival of the firm. Why? 10. List and describe something that is unique to General Motors that you believe has value?
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