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11 May 2018

Find and describe the three types of services GE Capital provides for Small Business. Summarize the benefits of GE Capital Healthcare Financial Services.

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Jarrod Robel
Jarrod RobelLv2
13 May 2018

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Related questions

Find 2016 financial statements for General Electric (Stock ticker: GE) from Yahoo! Finance, Google Finance,

(1) Estimate the company’s weights of capital (debt, preferred stock, and common stock).

(2) Estimate the company’s before-tax and after-tax component cost of debt;

(3) Estimate the firm’s component cost of preferred stock;

(4) Estimate the component cost of common equity using CAPM.

(5) Compute the firm’s weighted average cost of capital (WACC). Discuss your findings.

General Electric (Stock ticker: GE) Financial Statements:

https://finance.yahoo.com/quote/GE/financials?p=GE

Find the cost of equity for GE and Alstom. For market rate, use S&P 500 index return.

a) Find the beta of GE (GE) and Alstom (ALSO.PA) from Reuters. Which one is riskier? Are they

riskier then the market? Why? Why not?

b) For risk free rate, use 10‐ year US Treausry rate, which is 2.5%.

c) Find 2013 S&P 500 index return from http://www.1stock1.com/1stock1_141.htm and use it

as the market rate of return in below question.

d) Using cost of equity formula in Chapter 10, find the cost of equity for GE and Alstom. Are

they different? Which one has higher cost of equity? Why?

Find the cost of debt for GE and Alstom.

a) GE has a credit rating of AA+ and Alstom has a credit rating of BBB‐. Which one is riskier?

Why?

b) Default risk premium on AA+ rated bonds are 3% and BBB‐ rated bonds are 6%. The

marginal tax rate for both companies is 30%. What is the after tax cost of debt for GE and Alstom if the risk free rate (10 year US Treasury rate) is 2.5% ?

Suppose both GE and Alstom have 60% debt and 40% equity in their capital structure. They do not have any preferred stock. What is the WACC of GE and Alstom? Which one has a higher WACC? Why?

Suppose both GE and Alstom have a major project that they are considering. What should be the minimum return on the project, so that they will take on the project?

Discuss how healthcare organizations are financed. There are two means of acquiring capital for healthcare business: debt capital or equity. Describe the features of both. Include types of debt that exist and their characteristics, including their features and what they measure. Share an example or experience of how debt is used in everyday life and how lenders measure credit worthiness. Finally indicate how businesses determine and interpret the corporate cost of capital.

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