Our Services

Get 15% Discount on your First Order

[rank_math_breadcrumb]

Business & Finance Proforma Assignment for GM Motors

 

Part 1: WACC Calculation

Using concepts learned during the class, estimate the weighted average cost of capital (WACC) for your company. The process involves several key steps:

  1. Cost of Equity Calculation using CAPM Model:
    • Estimate beta for your company using regression analysis. Estimate beta using daily prices for past one year, weekly prices for the past two years, and monthly prices using the past five years. Do you get different beta using three approaches? Why? Which beta is the most appropriate beta for your company? Explain your reasoning in the excel document itself.
    • Estimate the cost of equity by employing the Capital Asset Pricing Model (CAPM), factoring in your company’s appropriate beta. Utilize an appropriate risk-free rate and a market risk premium of 6% for your calculation. 
  2. Cost of Debt Estimation:
    • Estimate the appropriate cost of debt for your company. You can use different approaches to estimate cost of debt.
      • Credit rating and Yield-spreads.
      • If credit rating is missing, find rating of firms in the same industry and similar size.
      • Adjust for expectations of changes in the future interest rates based on your economic analysis.
      • Explain your analysis in the excel document.
  3. Capital Structure Weight Calculation:
    • Determine the capital structure weights of equity and debt based on the current market values of equity and debt. This involves calculating the proportion of total capital represented by equity and debt.

By meticulously completing these steps, you’ll arrive at a comprehensive understanding of your company’s WACC, a vital metric used in investment decision-making and capital budgeting.

Part II: Pro-forma statements

Select the appropriate explicit forecast period for your company, ensuring it spans a minimum of 5 years and a maximum of 10 years. Utilize this chosen forecast period to estimate pro forma income statements and balance sheets for your company for the upcoming 5 to 10 years.

Part III: Free cash flow estimation and discounted cash flow valuation

As discussed in class, estimate free cash flow to firm and free cash flow to equity for your company. Using WACC estimates in part-I, estimate fair value of stock using discounted cash flow methodology. Which of the two approaches (FCFE vs FCF) is suitable for your firm? why?

Deliverable: Submit an Excel spreadsheet containing all pertinent details. Format the spreadsheet to enhance clarity and ease of understanding. Explicitly state the basic assumptions underlying your estimates for transparency and coherence. Use your excel to explicitly state your major assumptions and rationale for these assumptions.

 

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

MBA 699 4-2 Milestone 2

   1. Current employee demographics: Summarize the current employee demographics for the organization from the course scenario. a. Use Tableau to visualize the demographic data such as age, sex, marital status, education, and experience, and include the corresponding screenshots in your summary. Choose the graphs or charts that are best

HRM 6301 III

1 Three Keys to Success Joshua A. Learner Columbia Southern University LSS 1300: Learning Strategies for Success Dr. John Doe July 10, 2020 SAMPLE FORMAL ESSAY The title page includes the title of the assignment in bold font, the student’s name, the name of the university, the course name, the

ECO 6301 III

2 Economics for Managers ECO 6301 Unit III Essay Unit III Essay This 3-to-5-page essay measures your mastery of ULOs 1.1, 1.2, 2.1, 6.1, 6.2 and 7.1. Elasticity Assignment objective: Unit I introduced the benefits of markets to improving outcomes for producers and consumers. Unit II examined the role of

RCH 5301

2 Research Design and Methods RCH 5301 Unit II DB Describe a quantitative research project you would be interested in starting now or in the near future. Explain the problem and why this would be important for you to study. Why is a quantitative methodology an appropriate research strategy for

Business Finance – Accounting excel assignment

need this excel assignment done by tomorrow at 11:59. need formulas to be put in excel not just the answers Sheet1 Porsche and Mercedes-Benz, both based in Germany, are two of the largest automobile manufacturers in the world. The following information was provided in each company’s 2019 annual report. Porsche

Business Finance – Economics Global economics assignments

see attached READ ENTIRELY!  Assignments Week 2-6 NO AI!!! Week 2: DUE JULY 19 The role of government in the economy is often debated by economists and businesspeople. The debate ranges from having little to no government intervention to having a strong government presence in both business and social settings.

HRM 6301

2 Human Resources Management Methods HRM 6301 Equal employment opportunity and subsequent discrimination are major factors in today’s workplace. For a quick review, you can access the U.S. Equal Employment Opportunity Commission’s  Employees & Job Applicants webpage to review discrimination by type.  Considering the many types of employment discrimination, share which

dbs global economics

See attached DB1 Week 1 DUE JULY 09 Define capitalism and socialism and provide examples of countries that govern using each structure. Discuss why capitalism and socialism are currently spotlighted in U.S. politics giving the pros and cons of each organizational structure. Be specific and give supporting facts, not just

ECO 6301 II

2 Economics for Managers ECO 6301 Unit II This unit’s readings include information on pricing. You are introduced to the shutdown price, using elasticity to determine the effects of price changes, and cost-based pricing. Discuss the importance of considering elasticity in pricing decisions and the danger of relying solely on

Marketing Plan

iMBA Operations Strategy Module Summer 2024 Group Project One submission per group Only include your group name on the submission (points are deducted if individual group member names are included) . Please submit a Microsoft Word document. Limit of 20 pages, excluding title sheet, references, and appendices. 1. Overview of

WK1PR599

SEE ATTACHED 1 6 Peer Response: Cite 2 Scholary authors for each. •    Find at least TWO students whose conclusions bring new levels of understanding to your view on McDonald’s internal performance or conclusions. •    Discuss any major differences where you might disagree. 1Acj. A purpose/mission statement is

23

check f  This file is too large to display.View in new window

Dissertation Phase 3

To conclude the phase 3 of the dissertation and finally attach phase 1 & phase 2.  Recordings will be shared via zip, request you to use it for the NVivo analysis and prepare transcripts in a separate document 

Discussion Board and replies

Think about your experiences with the healthcare system, an experience a friend or family member has talked with you about, or a story you recently heard or read in the news. Discuss an ethical or legal situation involving healthcare from the perspective of either cultural differences, LGBTQ+ rights, quality, safety,

Supply Chain Effect

See attached files  BUSI 613 Journal Article Review Assignment Instructions Overview MBA programs around the country are starting to require their students to become more effective writers. This is in response to industry’s urging for grad schools to improve the writing skills of graduate students. Writing at the MBA level

Business management

SYLVIA PLATH [1932–1963] Daddy You do not do, you do not do Any more, black shoe In which I have lived like a foot For thirty years, poor and white, 5Barely daring to breathe or Achoo. Daddy, I have had to kill you. You died before I had time —