E1.5. Enterprise Market Value: General Mills and Hewlett-Packard (Medium)

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 Long-term debt Stockholders' equity $442.0 4,348.7 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 Short-term borrowings Long-term debt Stockholders' equity $11,513 711 7,688 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?