IBM's 1,228 million outstanding shares traded at $165 each when its 2010 financial statements were published. Those statements reported common shareholders' equity of $23,046 million and net financial obligations of $17,973 million. Footnotes reveal that the firm's net borrowing cost (after tax) is 3 .I percent.

a. Calculate the levered price-to-book and enterprise price-to-book ratios at the time.

What explains the difference between the two multiples?

b. Analysts were forecasting earnings per share of $13.22 for 2011. Calculate the forward levered PIE and forward enterprise PIE ratio.