Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
¶ … company is Boeing, which operates in two distinct sectors. About half the business is in commercial aircraft, and the other half is in defense contracting, usually aircraft, rockets and that sort of thing. Both industries have minimal competition, but the defense industry in particular is dependent on U.S. government spending for its survival. There is always risk when half of your company has only one customer. The aircraft industry faces risk in part relating to the price of fuel and overall demand for air travel.
Boeing has a moderate amount of financial risk. The debt-to-equity ratio is 5.22, which means that the company is mainly financed through debt. It should be noted, however, that most of this is current liabilities. Boeing does not have any preferred shares. So the capital structure is 83.9% debt and 16.1% equity. The liabilities are divided between 66.2% short-term liabilities and 33.8% long-term debt.
Boeing's market cap is $107.86 billion, with a share price of $154.95 and 704.39 million shares outstanding.
The current beta for Boeing is 1.04. It is not possible to guess what Boeing's beta would be if it had no long-term debt in its capital structure. The beta is the correlation of movements...
The general market. The capital structure is not included in this calculation. While it is true that some investors may take the capital structure into account when valuing the stock, there are many other factors involved in stock price movements, because stock price movements reflects the present value of expected future cash flows. Guessing about investor behavior, in retrospect, is pretty silly. Now, the book value per share is a metric that will change if the capital structure is different, so that might be a better question to ask.
The current tax rate of the company is 26.4%, based on last year's income statement. Boeing has a number of bonds that can be used to estimate the cost of debt. The yield to maturity of a 10-year issue is 2.76%, according to Morningstar. The after tax cost of debt would therefore be 2.03%. The cost of equity can be calculated by the capital asset pricing model:
Rf + ? (Rm-Rf).
0.22 + 1.04(7) = 7.5%
The dividend yield on common stock is 2.02%.
The weighted average cost of capital for the company is:
.839(2.03) + (.161)(7.5) = 1.70317 + 1.2075 = 2.91%
The current P/E of Boeing is 20.75. The five-year chart…
References
MSN Moneycentral. (2015). Boeing. Retrieved March 9, 2015 from http://www.msn.com/en-us/money/stockdetails/financials/fi-126.1.BA.NYS?ocid=qbeb
Morningstar. (2015). Boeing. Morningstar. Retrieved March 9, 2015 from http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=ba
Treasury.gov (2015). Daily Treasury yield curve rates. U.S. Department of the Treasury. Retrieved March 9, 2015 from http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Boeing and Airbus The airline industry is very large and complex but provides important services to the world economy which helps sustain development and provide connections to people across the globe. The purpose of this essay is to examine two corporations, Boeing and Airbus, and compare and contrast their competitive strategy within the airline industry. After discussing these approaches, this essay will suggest some alternative strategies that may be beneficial to
Lean Synchronization at Boeing The author of this report has been asked to focus on a particular realm and part of operations management as it relates to a particular firm. The operations management facet that shall be the focus of this report is lean synchronization and the company that shall be the focus is aircraft manufacturer Boeing. Boeing has done very well for itself in the grand scheme of things but
Boeing is considered the leader in commercial aircraft, military aircraft and missiles and space markets. As well as the design, development and manufacture of aircraft and space equipment, Boeing also has divisions managing the support of these activities and other activities that extend to real estate services, financial services and travel agency services. Boeing has a well-developed graduate program and the benefits for employees are numerous. While financial information up to
Boeing Company The Impact of Mission, Vision, and Primary Stakeholders on the overall success of the Boeing Company The Boeing Company is the world's largest aircraft manufacturing corporation. It designs, develops, manufactures, and sells commercial aircrafts, military aircrafts, missiles, electronic and defense systems, satellites, and highly advanced information and communication systems for airline companies, aerospace research institutes, defense organizations, and governmental bodies. The Boeing Company aims to become the leading player in
Boeing Planning Function of Management at Boeing As a provider of military equipment, a developer of defense technologies and an innovator in the field of aeronautics, the Boeing Corporation is a complex global network of divisions, departments and geographic contexts. For a corporation such as Boeing, a leading force in the development and retail of military technology, and lately with a focus on missile guidance systems and other non-commercial endeavors, the era
9% the previous year, and Net Profit Margin up to 5.1% from 1.9% the previous fiscal year. For all full financial analysis of the last five years of Boeing's financial history, please see the Appendix for The Boeing Company Ratio Analysis. While the company continues to excel at profitability, the areas of improvement include Days-to-Sell Inventory, which grew to 147 days in FY201, and Operating Cycle (time from taking an