Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2015, Caterpillar Inc. had about 657 million shares outstanding. Their book value was $36.3 per share, and the market price was $76.00 per share.

In 2015, Caterpillar Inc. had about 657 million shares outstanding. Their book value was $36.3 per share, and the market price was $76.00 per share. The companys balance sheet shows that the company had $16.20 billion of long-term debt, which was currently selling near par value. a. What was Caterpillars book debt-to-value ratio? (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? (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 companys cost of capital? Book value Market value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Management

Authors: Glen Arnold, James Pickford

2nd Edition

0582821762, 978-0582821767

More Books

Students also viewed these Finance questions

Question

Discuss the value of a good questionnaire design.

Answered: 1 week ago