Question
1. Consider the table given below to answer the first question (shares and market values in millions). Number of Shares Stock Price = Market Capitalization
1. Consider the table given below to answer the first question (shares and market values in millions).
| Number of Shares | Stock Price | = | Market Capitalization | |||||||||||||
| Callaway Golf (ELY) | 93.8 | $ | 8.76 | = | $ | 821 | ||||||||||
| Alaska Air Group (ALK) | 124.7 | $ | 80.77 | = | $ | 10,074 | ||||||||||
| Entergy (ETR) | 178.5 | $ | 75.92 | = | $ | 13,551 | ||||||||||
| Yum! Brands (YUM) | 408.7 | $ | 77.77 | = | $ | 31,875 | ||||||||||
| General Electric (GE) | 9,331.0 | $ | 30.34 | = | $ | 283,091 | ||||||||||
a. The price of Entergy stock has risen to $90. What is the market value of the firms equity if the number of outstanding shares does not change? (Enter your answer in billions rounded to 3 decimal places.)
b. The rating agency has revised Catalytic Concepts bond rating to A (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded to 2 decimal places.)
c. A farmer and a meatpacker use the commodity markets to reduce their risk. One agrees to buy live cattle in the future at a fixed price, and the other agrees to sell. Which one sells?
A farmer
A meatpacker
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Principles Of Finance With Excel
Authors: Simon Benninga, Tal Mofkadi
3rd Edition
0190296380, 9780190296384
