Question
In 2018, Caterpillar Inc. had about 654 million shares outstanding. Their book value was $29.0 per share, and the market price was $157.80 per share.
In 2018, Caterpillar Inc. had about 654 million shares outstanding. Their book value was $29.0 per share, and the market price was $157.80 per share. The company's balance sheet shows that the company had $18.80 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?
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Valuation The Art and Science of Corporate Investment Decisions
Authors: Sheridan Titman, John D. Martin
3rd edition
133479528, 978-0133479522
