Edelman Engines has $20 billion in total assets — of which cash and equivalents total $120 million. Its balance sheet shows $4 billion in current liabilities of which the notes payable balance totals $0.8 billion. The firm also has $10 billion in long-term debt and $6 billion in common equity.It has 500 million shares of common stock outstanding, and its stock price is $23 per share. The firm's EBITDA totals $1.38 billion. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What are Edelman's market/book and its EV/EBITDA ratios? Donot round intermediate calculations. Round your answers to two decimal places.M/B:EV/EBITDA:X

The objective of this question is to calculate the Market/Book (M/B) ratio and the Enterprise…

Answered: Edelman Engines has $20 billion in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Edelman Engines has $13 billion in total assets- of which cash and equivalents total $100 million. Its balance sheet shows $2.6 billion in current liabilities- of which the notes payable balance totals $1.03 billion. The firm also has $6.5 billion in long-term debt and $3.9 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $25 per share. The firm's EBITDA totals $1.05 billion. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What are Edelman's market/book and its EV/EBITDA ratios? Do not round intermediate calculations. Round your answers to two decimal places. M/B: EV/EBITDA:

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