1. Market Value Added. Here is a simplified balance sheet for Caterpillar Tractor: Current assets $42,524 Current liabilities $29,755 Long-term assets Long-term debt 27,752 14,317 46,832 Other liabilities 17,532 $89,356 Equity Total $89,356 Total Caterpillar has 657 million shares outstanding with a market price of $83 a share. (LO4-1) a. Calculate the company's market value added. b. Calculate the market-to-book ratio.
1. Market Value Added. Here is a simplified balance sheet for Caterpillar Tractor: Current assets $42,524 Current liabilities $29,755 Long-term assets Long-term debt 27,752 14,317 46,832 Other liabilities 17,532 $89,356 Equity Total $89,356 Total Caterpillar has 657 million shares outstanding with a market price of $83 a share. (LO4-1) a. Calculate the company's market value added. b. Calculate the market-to-book ratio.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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
Transcribed Image Text:1.
Market Value Added. Here is a simplified balance sheet for Caterpillar Tractor:
Current assets
$42,524
Current liabilities
$29,755
Long-term assets
46,832
Long-term debt
27,752
Other liabilities
14,317
Equity
17,532
$89,356
Total
$89,356
Total
Caterpillar has 657 million shares outstanding with a market price of $83 a share. (LO4-1)
a. Calculate the company's market value added.
b. Calculate the market-to-book ratio.
c. Has the company created value for shareholders?
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