1. Suppose we want to calculate the WACC for CAT in 2019. Knowing the equity value is $93,283 M, what is the weight for the cost of debt?

2. Based on the Income statement, what is the average tax rate of CAT in the past THREE years? N.B. In an adjusted income statement, the Profit before tax is Pretax Income (Loss), GAAP

Caterpillar Inc (CAT US) - Standardized 22 Months Ending FY 2015 FY 2010 FY 2017 Millions of USD except Per Share dal Assets & ST + ST Investments 400 0.0 Accounts & Notes Recer 58 * Account Recave. Nel + Raw Materials was proces + Other inventary 5, . + Goodwill + Derivative & Hedging AS win otal Assets +Payables & Adholders' Equity Other Parables & Acce +ST Bomowings STA +ST Operating Lesses Cument Portion of LTD Date + Derivatives & Hedging 22. Se 63. 51270 Caterpillar Inc (CAT US) - Adjusted FY 2015 12/31/2015 47,011.0 44. 147.0 2,864.0 34,133.0 33,546.0 587.0 12,878.0 0.0 7,971.0 4,951.0 2, 119.0 901.0 4,907.0 346.0 442.0 507.0 65.0 173.0 -269.0 4,561.01 1,122.0 FY 2016 12/31/2016 38,537.0 35,773.0 2,764.0 28,640.0 28,044.0 596.0 9,897.0 0.0 6,136.0 4,383.0 1,853.0 -100.0 3,761.0 1, 108.0 431.0 505.0 74.0 57.0 620.0 2,653.0 2,514.0 FY 2017 12/31/2017 45,462.0 42,676.0 2,786.0 31,906.0 31,260.0 646.0 13,556.0 0.0 7,539.0 4,999.0 1,842.0 698.0 6,017.0 461.0 409.0 531.0 122.0 213.0 -161.0 5,556.01 1,474.0 FY 2018 12/31/2018 54,722.0 51,822.0 2,900.0 37,719.0 36,997.0 722.0 17,003.0 0.0 7,829.0 5,478.0 1,850.0 501.0 9, 174.0 471.0 209.0 404.0 195.0 201.0 61.0 8,703.0 881.0 FY 2019 12/31/2019 53,800.0 50,755.0 3.045.01 37,384.0 36,630.01 754.0 16,416.01 0.0 7,422.0 5,162.01 1,693.01 567.01 8,994.0 478.01 219.0 421.0 202.0 67.01 192.0 8,516.00 704.0 In Millions of USD except Per Share 12 Months Ending Revenue + Sales & Services Revenue + Financing Revenue - Cost of Revenue + Cost of Goods & Services + Cost of Financing Revenue Gross Profit + Other Operating Income - Operating Expenses + Selling, General & Admin + Research & Development + Other Operating Expense Operating Income (Loss) - Non-Operating (Income) Loss + Interest Expense, Net + Interest Expense - - Interest Income + Foreign Exch (Gain) Loss + Other Non-Op (Income) Loss Pretax Income (Loss), Adjusted - Abnormal Losses (Gains) + Merger/Acquisition Expense + Abnormal Derivatives + Asset Write-Down + Impairment of Goodwill + Impairment of Intangibles + Gain/Loss on Sale/Acquisition of Business + Legal Settlement + Restructuring + Sale of Investments + Other Abnormal Items Pretax Income (Loss), GAAP - Income Tax Expense (Benefit) + Current Income Tax + Deferred Income Tax + Tax Allowance/Credit (Income) Loss from Affiliates Income (Loss) from Cont Ops Net Extraordinary Losses (Gains) + Discontinued Operations + XO & Accounting Changes Income (Loss) Incl. MI - Minority Interest Net Income, GAAP - Preferred Dividends - Other Adjustments Net Income Avail to Common, GAAP 595.0 943.0 1,019.0 386. 236.0 -85.0 985.0 179.00 3,439.0 916.0 1,223.01 -307.0 139.0 192.0 623.0 -431.0 1,256.0 -83.0 301.0 4,082.0 3,339.0 2, 126.0 1,213.0 495.0 7,822.0 1,698.0 1,478.0 220.0 468.0 7,812.0 1.746.01 1,718.01 28.0 6.0 -16.0 -59.0 0.0 0.0 0.0 0.0 2,523.0 0.01 0.0 0.01 2,523.0 11.0 2,512.01 0.01 0.0 2,512.0 759.0 0.0 0.0 0.01 759.0 5.01 -24.0 6,148.0 0.0 0.0 0.0 6,148.0 1.0 6, 147.0 0.0 0.0 6,147.0 -28.0 6,094.0 0.0 0.01 0.0 6,094.0 1.0 6,093.01 0.0 -59.0 8.0 -67.0 0.0 0.0 -67.0 754.01 0.0 0.0 754.0 0.0 6,093.01 Net Income Avail to Common, Adj Net Abnormal Losses (Gains) Net Extraordinary Losses (Gains) 3,215.5 703.51 0.0 1,916.4 1,983.4 0.0 4,122.7 3,368.7 0.0 6,817.3 670.3 0.0 6,451.6 ) 358,61 0.0 Basic Weighted Avg Shares Basic EPS, GAAP Basic EPS from Cont Ops Basic EPS from Cont Ops, Adjusted 594.3 4.23 4.23 584.3 -0.11 -0.11 3.28 591.8 1.27 1.27 6.97 591.4 10.39 10.39 11.53 561.6 10.85 10.85 5.41 11.49 Diluted Weighted Avg Shares Diluted EPS, GAAP Diluted EPS from Cont Ops Diluted EPS from Cont Ops, Adjusted 601.3 4.18 4.18 5.35 584.3 -0.11 -0.11 3.28 599.3 1.26 1.26 6.88 599.4 10.26 10.26 11.38 567.5 10.74 10.74 11.37 Caterpillar Inc (CAT US) - Standardized 22 Months Ending FY 2015 FY 2010 FY 2017 Millions of USD except Per Share dal Assets & ST + ST Investments 400 0.0 Accounts & Notes Recer 58 * Account Recave. Nel + Raw Materials was proces + Other inventary 5, . + Goodwill + Derivative & Hedging AS win otal Assets +Payables & Adholders' Equity Other Parables & Acce +ST Bomowings STA +ST Operating Lesses Cument Portion of LTD Date + Derivatives & Hedging 22. Se 63. 51270 Caterpillar Inc (CAT US) - Adjusted FY 2015 12/31/2015 47,011.0 44. 147.0 2,864.0 34,133.0 33,546.0 587.0 12,878.0 0.0 7,971.0 4,951.0 2, 119.0 901.0 4,907.0 346.0 442.0 507.0 65.0 173.0 -269.0 4,561.01 1,122.0 FY 2016 12/31/2016 38,537.0 35,773.0 2,764.0 28,640.0 28,044.0 596.0 9,897.0 0.0 6,136.0 4,383.0 1,853.0 -100.0 3,761.0 1, 108.0 431.0 505.0 74.0 57.0 620.0 2,653.0 2,514.0 FY 2017 12/31/2017 45,462.0 42,676.0 2,786.0 31,906.0 31,260.0 646.0 13,556.0 0.0 7,539.0 4,999.0 1,842.0 698.0 6,017.0 461.0 409.0 531.0 122.0 213.0 -161.0 5,556.01 1,474.0 FY 2018 12/31/2018 54,722.0 51,822.0 2,900.0 37,719.0 36,997.0 722.0 17,003.0 0.0 7,829.0 5,478.0 1,850.0 501.0 9, 174.0 471.0 209.0 404.0 195.0 201.0 61.0 8,703.0 881.0 FY 2019 12/31/2019 53,800.0 50,755.0 3.045.01 37,384.0 36,630.01 754.0 16,416.01 0.0 7,422.0 5,162.01 1,693.01 567.01 8,994.0 478.01 219.0 421.0 202.0 67.01 192.0 8,516.00 704.0 In Millions of USD except Per Share 12 Months Ending Revenue + Sales & Services Revenue + Financing Revenue - Cost of Revenue + Cost of Goods & Services + Cost of Financing Revenue Gross Profit + Other Operating Income - Operating Expenses + Selling, General & Admin + Research & Development + Other Operating Expense Operating Income (Loss) - Non-Operating (Income) Loss + Interest Expense, Net + Interest Expense - - Interest Income + Foreign Exch (Gain) Loss + Other Non-Op (Income) Loss Pretax Income (Loss), Adjusted - Abnormal Losses (Gains) + Merger/Acquisition Expense + Abnormal Derivatives + Asset Write-Down + Impairment of Goodwill + Impairment of Intangibles + Gain/Loss on Sale/Acquisition of Business + Legal Settlement + Restructuring + Sale of Investments + Other Abnormal Items Pretax Income (Loss), GAAP - Income Tax Expense (Benefit) + Current Income Tax + Deferred Income Tax + Tax Allowance/Credit (Income) Loss from Affiliates Income (Loss) from Cont Ops Net Extraordinary Losses (Gains) + Discontinued Operations + XO & Accounting Changes Income (Loss) Incl. MI - Minority Interest Net Income, GAAP - Preferred Dividends - Other Adjustments Net Income Avail to Common, GAAP 595.0 943.0 1,019.0 386. 236.0 -85.0 985.0 179.00 3,439.0 916.0 1,223.01 -307.0 139.0 192.0 623.0 -431.0 1,256.0 -83.0 301.0 4,082.0 3,339.0 2, 126.0 1,213.0 495.0 7,822.0 1,698.0 1,478.0 220.0 468.0 7,812.0 1.746.01 1,718.01 28.0 6.0 -16.0 -59.0 0.0 0.0 0.0 0.0 2,523.0 0.01 0.0 0.01 2,523.0 11.0 2,512.01 0.01 0.0 2,512.0 759.0 0.0 0.0 0.01 759.0 5.01 -24.0 6,148.0 0.0 0.0 0.0 6,148.0 1.0 6, 147.0 0.0 0.0 6,147.0 -28.0 6,094.0 0.0 0.01 0.0 6,094.0 1.0 6,093.01 0.0 -59.0 8.0 -67.0 0.0 0.0 -67.0 754.01 0.0 0.0 754.0 0.0 6,093.01 Net Income Avail to Common, Adj Net Abnormal Losses (Gains) Net Extraordinary Losses (Gains) 3,215.5 703.51 0.0 1,916.4 1,983.4 0.0 4,122.7 3,368.7 0.0 6,817.3 670.3 0.0 6,451.6 ) 358,61 0.0 Basic Weighted Avg Shares Basic EPS, GAAP Basic EPS from Cont Ops Basic EPS from Cont Ops, Adjusted 594.3 4.23 4.23 584.3 -0.11 -0.11 3.28 591.8 1.27 1.27 6.97 591.4 10.39 10.39 11.53 561.6 10.85 10.85 5.41 11.49 Diluted Weighted Avg Shares Diluted EPS, GAAP Diluted EPS from Cont Ops Diluted EPS from Cont Ops, Adjusted 601.3 4.18 4.18 5.35 584.3 -0.11 -0.11 3.28 599.3 1.26 1.26 6.88 599.4 10.26 10.26 11.38 567.5 10.74 10.74 11.37