a. General Mills, Inc., the large manufacturer of packaged foods, reported the following in its annual report
Question:
a. General Mills, Inc., the large manufacturer of packaged foods, reported the following in its annual report for the year ending May 25, 2008 (in millions):
Short term borrowing .........$ 442.0
Long-tern debt ...........4,348.7
Stockholders equity .........6,215.8
The short-term borrowing and long-term debt are carried on the balance sheet at approximately their market value. The firm’s 337.5 million shares traded at $62 per share when the annual report was released. From these numbers, calculate General Mills’s enterprise market value (the market value of the firm).
b. Hewlett-Packard, the computer equipment manufacturer and systems consultant, had 2,473 million shares outstanding in May 2008, trading at $47 per share. Its most recent quarterly report listed the following (in millions):
Investments in interest-bearing debt
Securities and deposits ............$11,513
Short-term borrowings ............ 711
Long-term debt ............... 7,688
Stockholders equity .............. 38,153
Calculate the enterprise market value of Hewlett-Packard. The question requires you to consider the treatment of the interest-bearing debt investments. Are they part of the enterprise?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
a General Mills Market value of the equity 62 3375 million shares 209250 million Book value of total ...View the full answer
