Table 2.2

Credit rating Interest rate

AAA. 2.59%

AA. 2.62

A. 3.03

BBB. 4.32

BB. 5.62

B. 8.32

Consider the table given below to answer the first question (shares and market values in millions). Number of Shares Market Stock Price- Capitalization Callaway Golf (ELY) Alaska Air Group (ALK) Entergy (ETR) Yum! Brands (YUM) General Electric (GE) 93.8 $8.76 . $ 821 124.7 80.7710,074 178.5 75.92 13,551 408.7 77.77 31,875 9,331.0 30.34283,091 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.) Market value b. The rating agency has revised Catalytic Concept's bond rating to A (use Table 22). What interest rate approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded t decimal places.) Interest rate