Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2018, Caterpillar Inc. had about 594 million shares outstanding. Their book value was $34.0 per share, and the market price was $154.30 per share.

image text in transcribed

In 2018, Caterpillar Inc. had about 594 million shares outstanding. Their book value was $34.0 per share, and the market price was $154.30 per share. The company's balance sheet shows that the company had $25.80 billion of long-term debt, which was currently selling near par value. a. What was Caterpillar's 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 company's cost of capital? a. Book debt-to-value ratio b. Markeet debt-to-value ratio Measure c

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

Banking And Beyond The Evolution Of Financing Along Traditional And Alternative Avenues

Authors: Caterina Cruciani, Gloria Gardenal , Elisa Cavezzali

1st Edition

3030457516,3030457524

More Books

Students also viewed these Finance questions

Question

What are the problems with rate-of-return regulation?

Answered: 1 week ago

Question

help asp

Answered: 1 week ago