Presidentes De Mexico Y Aportaciones

THE COST OF CAPITAL
Fortune magazine conducts annual surveys of business loaders to identify the most-admired U.S companies. Since the surveys began. General Electric has consistently ranked eitherat or close to the top of the list. Although GE`s stock has fallen sharply in recent times, likes that of most other companies, it was still in eighth place in the March 2009 survey.
GE is the mostdiversified company in the world. It originally manufactured electric generating equipment and light bulbs. Then it branched into appliances and industrial equipment such as jet engines andlocomotives, then into infrastructure, various industrial services, movies, TV, and loans to individuals and businesses. People tend to think of GE as an industrial company, but by far its largest unit isGE Capital, its finance unit. This reliance on GE Capital, combined with uncertainty about potential losses on its huge loan portfolio, was primarily responsible for GE`s poor stock priceperformance in 2008-2008.
A key factor in GE`s long-run success has been its financial discipline: the company is reported to have set a uniform “hurdle rate” for potential new investments and theaccepted projects if and only if their expected returns exceed that hurdle rate. Historically, the same hurdle rate was used for all projects apparently the company did not systematically vary the rate toreflect individual they had forecasted, and careers rose or fell depending on whether or not they “ made their numbers”
With 20-20 hindsight, we can see that there was a flaw in GE`s logic. Theeconomy enjoyed a strong upward trend from 1945 to 2007, so defaults on mortgages, corporate debt, credit cards, credit cards, and other debt instruments were relatively low. Moreover, until 2009 GE wasone of only six nonfinancial companies with a AAA bond rating, which enabled it to borrow at extremely low rates and the re-lend the money at much higher rates. In that environment, it was easy...