Q2. (a) Explain how the market value of stocks and bonds differ from their book value. (b) Explain what a leverage buyout (LBO) is, and what Enterprise Value means. Q4. ACCO Brands owns several brand name office products you might have come across. Today's closing stock price of ACCO Brands is $6.63 per share and the number of outstanding shares is 94.46 million shares. (a) Using their financial statements (shown below), calculate ACCO Brands' Market-to-Book (M/B) ratio and Price-to-Earnings (P/E) ratio. (b) If you own a business selling stylus pens (for tablets), which ratio do you want to use if at all to evaluate your firm's equity value, and why? Consolidated Balance Sheets - USD ($) $ in Millions Dec. 31, 2019 + Cash and cash equivalents 27.8 Accounts receivable 453.7 Inventories 283.3 Other current assets 41.2 Total current assets 806.0 Total property, plant and equipment 651.7 Less: accumulated depreciation (384.6) Property, plant and equipment, net 267.1 Right of use asset, leases 101.9 Deferred income taxes 119.0 Goodwill 718.6 Identifiable intangibles 758.6 Other non-current assets 17.4 Other non-current assets 17.4 Total assets 2,788.6 Notes payable 3.7 Current portion of long-term debt 29.5 Accounts payable 245.7 Accrued compensation 48.5 Accrued customer program liabilities 99.7 Operating Lease, Liability, Current 21.8 Other current liabilities 139.9 Total current liabilities 588.8 Long-term debt 777.2 Long-term lease liabilities 89.8 Deferred income taxes 177.5 Pension and post-retirement benefit obligations 283.2 Other non-current liabilities 98.4 Total liabilities 2,014.9 Common stock 1.0 Treasury stock (38.2) Paid-in capital 1,890.8 Accumulated other comprehensive loss (505.7) Accumulated deficit (574.2) Total stockholders' equity 773.7 Total liabilities and stockholders' equity 2,788.6 Consolidated Statements of Income - USD ($) $ in Millions Dec. 31, 2019 Net sales 1,955.7 Cost of products sold 1,322.2 Gross profit 633.5 Selling, general and administrative expenses 389.9 Amortization of intangibles 35.4 Restructuring charges 12.0 Total operating costs and expenses 437.3 Operating income 196.2 Interest expense 43.2 Amortization of intangibles 35.4 Restructuring charges 12.0 Total operating costs and expenses 437.3 Operating income 196.2 Interest expense 43.2 Interest income (3.2) Non-operating pension income (5.5) Other (income) expense, net (1.8) Income before income tax 163.5 Income tax expense 56.7 Net income 106.8