Repeat this procedure for the other 3 auto companies. Do you find similar capital structures for each of the 4 companies? Do you find that the capital structures have moved in the same direction over the past 5 years, or have the different companies changed their capital structures in different ways over the past 5 years?

Access the Thomson ONE problems through the ThomsonNOW Web site. Use the Thomson ONE—Business School Edition online database to work this chapter’s questions.

Exploring the Capital Structures for Four of the World’s Leading Auto Companies

This chapter provides an overview of the effects of leverage and describes the process that firms use to determine their optimal capital structure. The chapter also indicates that capital structures tend to vary across industries and across countries. If you are interested in exploring these differences in more detail, Thomson One provides information about the capital structures of each of the companies it follows.

The following discussion questions demonstrate how we can use this information to evaluate the capital structures for four of the world’s leading automobile companies: General Motors (GM), Ford (F), BMW (BMW), and Toyota (J:TYMO). As you gather information on these companies, be mindful of the currencies in which these companies’ financial data are reported.