GM’s Unit Sales Exposure (Worldwide) 19 5.3 GM’s Auto Revenue Exposure (Worldwide) 21 5.4 Moving to a net income like exposure 22 5.5 Hedging the resulting exposure 23 6. CONCLUSION 24 7. SOURCES USED for INFORMATION 24 1. INTRODUCTION General Motors is a large multinational enterprise with operations in more than 200 different countries. It is an American multinational automotive corporation headquartered in Detroit‚ Michigan and the world ’s largest automaker (2001). It employs 365‚000 people
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General Motors ’ Strategic Analysis Automotive Industry The automobile industry is the industry involved in the design‚ development‚ manufacture‚ marketing‚ and also of motor vehicles. In 2007‚ more than million vehicles‚ including cars and commercial vehicles were produced. In 2007‚ a total of 71.9 million new automobiles were sold worldwide: 22.9 million in Europe‚ 21.4 million in Asia-Pacific‚ 19.4 million in USA and Canada‚ 4.4 million in Latin America‚ 2.4 million in the Middle East and
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Capital Structure Decisions: Which Factors are Reliably Important? Murray Z. Frank1 and Vidhan K. Goyal2 First draft: March 14‚ 2003. Current draft: December 20‚ 2003. ABSTRACT This paper examines the relative importance of 38 factors in the leverage decisions of publicly traded U.S. firms from 1950 to 2000. The most reliable factors are median industry leverage (+ effect on leverage)‚ market-to-book ratio (-)‚ collateral (+)‚ bankruptcy risk as measured by Altman’s Z-Score (-)‚ dividend-paying
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of Diageo‚ the treasury team was given the task of establishing the cost of capital for each of the different areas the company operated. The team had to create a simulation model which should consider new finance approaches‚ treasury functions to focus on‚ what the firm’s risk footprints will be‚ how to calculate cost of capital and finally how to optimally structure capital. How has Diageo managed its capital structure? Both Grand Metropolitan and Guinness had little debt prior to the merger‚
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When I read the General Motors Misled Grieving Families on a Lethal Flaw‚ an overwhelming sadness fell upon me. I was sad that 26 families had to bury family members die to faulty equipment in the Chevrolet Cobalts. The key ethical issue is that General Motors knew that the black boxes in the Cobalts confirmed the potential fatal defect existing in hundreds of thousands of cars (Stout et al.‚ 2014). Another ethical issue was the fact that GM would tell the families of the victims that they had no
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Chapter 12 Capital Structure and Leverage LEARNING OBJECTIVES After reading this chapter‚ students should be able to: • Explain why capital structure policy involves a trade-off between risk and return‚ and list the four primary factors that influence capital structure decisions. • Distinguish between a firm’s business risk and its financial risk. • Explain how operating leverage contributes to a firm’s business risk and conduct a breakeven analysis‚ complete with
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Kale et al (1991) suggests that the level of risk is one of the main determinants of a firm`s capital structure. By looking at the trade off theory we might expect a negative association when risk and leverage are concerned. If firms have high earnings volatility‚ for some obvious reasons‚ they would not want to indulge in debt financing. It follows that when firms are exposed to bankruptcy and agency costs greater is the incentive to reduce the level of debt otherwise the more volatile a firm`s
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then you will conclude that it is not on the right strategic path. The essay should be about 1‚000 words in length. No need to list references. The essay will be due on October 21. Do not submit a hard copy. Send me your essay by email. General Motors Company
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International Operations North America GM World Headquarters in Detroit In North America‚ GM products focus primarily on its four core divisions – Chevrolet‚ Cadillac‚ Buick‚ and GMC. The White House characterized the GM restructuring as a shift toward a new leaner‚ greener GM‚ which will aim to break even with annual sales much lower than previously stated. President Obama declared that the restructuring "will mark the end of an old GM‚ and the beginning of a new GM; a new GM that can
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and industrial espionage. “Jose Ignacio Lopez de Arriortua was known as the "Grand Inquisitor" and "Super Lopez" during his tenure at General Motors‚ a wizard of cost reduction and streamlined production” (Vettraino‚ 2008). He is one of the most respected individuals in the automobile industry .Under the leadership of Jack Smith‚ the Chairman of General Motors‚ Lopez revolutionized GM in the area of cost-control. He is noted for striking hard bargains with suppliers and will push till he attained
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