Number of Shares Stock Price X = Market Capitalization = $ 821 93.8 X $ 8.76 124.7 Callaway Golf (ELY) Alaska Air Group (ALK) Entergy (ETR) Yum! Brands (YUM) General Electric (GE) 178.5 x $ 80.77 * $ 75.92 x $ 77.77 $ $ $ $ 10,074 13,551 31,875 408.7 = 9,331.0 x $ 30.34 = $ 283,091 a. The price of Entergy stock has risen to $90. What is the market value of the firm's equity if the number of outstanding shares does not change? (Enter your answer in billions rounded to 3 decimal places.) b. The rating agency has revised Catalytic Concept's bond rating to A (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded to 2 decimal places.) c. A farmer and a meatpacker use the commodity markets to reduce their risk. One agrees to buy live cattle in the future at a fixed price, and the other agrees to sell. Which one sells? A farmer A meatpacker Consider the table given below to answer the first question (shares and market values in millions). Number of Shares Stock Price Market Capitalization X 11 93.8 * $ 8.76 $ 11 821 124.7 M $ 80.77 = $ Callaway Golf (ELY) Alaska Air Group (ALK) Entergy (ETR) Yum! Brands (YUM) General Electric (GE) 178.5 X $ 75.92 = $ 10,074 13,551 31,875 408.7 X $ 77.77 $ 9,331.0 $ 30.34 Il $ 283,091 a. The price of Entergy stock has risen to $90. What is the market value of the firm's equity if the number of outstanding shares does not change? (Enter your answer in billions rounded to 3 decimal places.) b. The rating agency has revised Catalytic Concept's bond rating to A I (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded to 2 decimal places.) c. A farmer and a meatpacker use the commodity markets to reduce their risk One agrees to buy live cattle in the future at a fixed price, and the other agrees to sell. Which one sells? A farmer A meatpacker (Ctrl) Credit Rating Interest Rate 2.59% TABLE 2.2 Interest rates on long-term corporate bonds, March 2016. The interest rate is lowest for top-quality (AAA) issuers. The rate rises as credit quality declines. AAA AA BBB BB B 2.62 3.03 4.32 5.62 8.32 Source: Thomson Reuters