It designs, builds and sells cars, trucks and automobile parts. The company also provides automotive financing services through General Motors Financial Company, Inc.
It is used in finance to either compare two companies with different levels of debt and equity or to analyze a potential takeover target. This is because debt and cash have huge impacts on a company's financials.
Often, two companies that seem to have similar market capitalizations have very different enterprise values, due to these effects. For example, if a company was trying to compare its value to the value of a competitor, it would have to look beyond market capitalizations.
Based on TEV, the competitor's value would actually be higher, due to the effects of the debt. This TEV measure also dictates potential takeover targets and the amount that should be paid for the acquisition. Using the example above, let's say that instead of a comparison to a competitor, the company was looking to acquire a competitor.
This is a more accurate price for the company. Using the TEV to Normalize Values The TEV, in addition to a comparison and potential takeover tool, also allows a company or financial analyst to normalize the valuation of a company. Since it only takes into account market capitalization and profits, it can make a public equity look expensive compared to other companies when in reality, it's not.
This allows the stock price of public companies to be better evaluated for investment purposes.In , the Obama Administration bailed out General Motors Co. (NYSE: GM). It was a crucial part of the recovery process for both GM and the automotive industry as a whole.
General Motors Company is an American multinational corporation. It designs, builds and sells cars, trucks and automobile parts. The company also provides automotive financing services through General Motors Financial Company, Inc.
Gmail is email that's intuitive, efficient, and useful. 15 GB of storage, less spam, and mobile access. Weighted Average Cost of Capital (WACC) FCFF Growth Rate ; See Also: Ford Motor Co.
(F), PV of FCFF. Intrinsic Stock Value (Valuation Summary) General Motors Co., free cash flow to the firm (FCFF) forecast. Stock valuation by this method is not possible because prior year FCFF is less than zero.
Nr Company Name TKR Member of Cusip # 1: Inc: YI: S: YI" 2: Ppty Insur: PIH: S: PIH" 3: Degree Cap: TURN: SO: HHGP" 4: tranceformingnlp.com: FLWS. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. The WACC (discount rate) calculation for General Motors uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate for General Motors over the long term.
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The WACC is essentially a blend of the cost of equity and the after-tax cost of debt. The cost of equity is usually calculated using the capital asset pricing model (CAPM), which defines the cost of equity as follows: re = rf + β × (rm - rf) Where: rf = Risk-free rate β = Beta (levered) (rm - rf) = Market risk premium. Weighted Average Cost of Capital (WACC) FCFF Growth Rate ; See Also: Ford Motor Co. (F), PV of FCFF. Intrinsic Stock Value (Valuation Summary) General Motors Co., free cash flow to the firm (FCFF) forecast. Stock valuation by this method is not possible because prior year FCFF is less than zero. Speed-GM - Game & Voice control panel. WAAC - SGM Login ×.
To start viewing messages, select the forum that you want to visit from the selection below. The WACC is commonly referred to as the firm's cost of capital.
Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation.