Question
Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table. Number of
Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table.
| Number of Share (millions) | Stock Price | = | Market Capitalization ($ millions) | |||||||||||||
| Callaway Golf (ELY) | 94.6 | $ | 16.36 | = | $ | 1547.66 | ||||||||||
| Alaska Air Group (ALK) | 123.4 | $ | 61.96 | = | $ | 7645.86 | ||||||||||
| Yum! Brands (YUM) | 332.5 | $ | 85.13 | = | $ | 28,305.73 | ||||||||||
| Caterpillar Tractor (CAT) | 147.4 | $ | 597.63 | = | $ | 88,090.66 | ||||||||||
| Microsoft (MSFT) | 7,705.0 | $ | 91.27 | = | $ | 703,235.35 | ||||||||||
a. The price of Yum! Brand's stock has risen to $185. 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.)
Market value____________
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 1 decimal place.)
Interest rate _________%
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
9th Edition
032431986X, 9780324319866
