Question
Select a major industrial or commercial company based in the United States and listed on one of the major stock exchanges in the United States.
Select a major industrial or commercial company based in the United States and listed on one of the major stock exchanges in the United States. Each student should select a different company. I choose General Electric for this assignment. Answer the following questions and demonstrating with calculations and financial data the following questions.
7. What would the beta of this company (General Electric) be if it had no long term debt in its capital structure
8. What is the company's current marginal tax rate?
9. What is the cost of debt before and after taxes?
10. What is the cost of preferred stock if any?
11. What is the cost of equity?
12. What is the cash dividend yield on the common stock?
13. What is the weighted average cost of capital of the company?
14. What is the price earnings multiple of the company?
15. How has the company's stock been performing in the last 5 years?
16. How would you assess the overall risk structure of the company in terms of its operating risks and financial risk (debt to capitalization ratio)?
17. Would you invest in this company? Why or why not?
18. The last page of this paper should be a bibliography of the sources you used to prepare this paper.
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