Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2018, Caterpillar Inc. had about 665 million shares outstanding. Their book value was $37.0 per share, and the market price was $152.80 per share.

image text in transcribed

In 2018, Caterpillar Inc. had about 665 million shares outstanding. Their book value was $37.0 per share, and the market price was $152.80 per share. The company's balance sheet shows that the company had $28.50 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? Book debt-to-value ratio b. Markeet debt-to-value ratio C. Measure

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

Financial management theory and practice

Authors: Eugene F. Brigham and Michael C. Ehrhardt

13th edition

1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099

More Books

Students also viewed these Finance questions