In

$2$

$0$

$2$

$0$

$,$

$$Caterpillar Incorporated had about

$5$

$4$

$0$

$$million shares outstanding. Their book value was $

$3$

$8$

$.$

$4$

$$per share, and the market price was $

$1$

$1$

$4$

$.$

$7$

$0$

$$per share. The company

$$

s balance sheet shows that the company had $

$2$

$8$

$.$

$6$

$5$

$$billion of long

$-$

term debt, which was currently selling near par value.

What was Caterpillar

$$

s book debt

$-$

to

$-$

value ratio?

Note: Do not round intermediate calculations. Enter your answer as a decimal rounded to

$2$

$$decimal places.

What was its market debt

$-$

to

$-$

value ratio?

Note: Do not round intermediate calculations. Enter your answer as a decimal rounded to

$2$

$$decimal places.

Which measure should you use to calculate the company

$$

s cost of capital?In $2020,$ Caterpillar Incorporated had about $540$ million shares outstanding. Their book

value was $$38\mathrm{.}4$ per share, and the market price was $$114\mathrm{.}70$ per share. The company's

balance sheet shows that the company had $$28\mathrm{.}65$ billion of long$-$term debt, which was

currently selling near par value.

a$.$ What was Caterpillar's book debt$-$to$-$value ratio?

Note: Do not round intermediate calculations. Enter your answer as a decimal

rounded to $2$ decimal places.

b$.$ What was its market debt$-$to$-$value ratio?

Note: Do not round intermediate calculations. Enter your answer as a decimal

rounded to $2$ decimal places.

c$.$ Which measure should you use to calculate the company's cost of capital?

Answer is complete but not entirely correct.