Discuss the process of capital budgeting

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Five brief articles to reference are found on the "Headlines" page of the menu for GE on Yahoo! Finance. These articles were posted on Thursday, April 21, 2011 and Friday, April 22, 2011. Additionally, as you construct your answers, please reference not only General Electric (GE) but also Citigroup, Inc. (C), Koninklijke Philips Electronics NV (PHG), and Siemens AG (SI) which are shown as competitors for General Electric.

The articles from the "Headlines" page are: 10 Dividend Stocks Paying More Cash, Companies Start Opening Their Wallets; G.E. Earnings Soar on Lending Arm, Daily Dividend Report and, Commercial Real Estate Comeback Needs Job Growth to Continue.

a) Discuss the process of capital budgeting, the weighted average cost of capital, optimal capital budget, and optimal capital structure. No calculations or comparisons to other companies are necessary. Discussion should include business circumstances as reflected in the articles.

b) Discuss the decision making process that relates to dividends. Mention specific amounts for GE and the other three companies, as well as material from the articles.

c) Discuss the investing and financing decisions that relate to working capital management. Calculations are expected for GE as compared to the other three companies. No reference to articles is necessary.

 

Reference no: EM1348743

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