In 2013 Caterpillar Inc. had about 759 million shares outstanding. Their book value was $35 per share, and the market price was $94.50 per share. The companys balance sheet shows that the company had $32.5 billion of long-term debt, which was currently selling near par value.

a.	What was Caterpillars book debt-to-value ratio? (Enter your answer as a decimal rounded to 2 decimal places. Do not round intermediate calculations.)

Book value

b.	What was its market debt-to-value ratio? (Enter your answer as a decimal rounded to 2 decimal places. Do not round intermediate calculations.)

Market value

c.

Which measure should you use to calculate the companys cost of capital?

	Book value
	Market value