In 2013 Caterpillar Inc. had about 648 million shares outstanding. Their book value was $27 per share, and the market price was $83.50 per share. The company's balance sheet shows that the company had $25.7 billion of long- term debt, which was currently selling near par value. a. What was Caterpillar's book debt-to-value ratio? b. What was its market debt-to-value ratio?

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 1STP
icon
Related questions
Question
100%

General Accounting No 1

In 2013 Caterpillar Inc. had about 648 million shares
outstanding. Their book value was $27 per share, and the
market price was $83.50 per share. The company's balance
sheet shows that the company had $25.7 billion of long-
term debt, which was currently selling near par value.
a. What was Caterpillar's book debt-to-value ratio?
b. What was its market debt-to-value ratio?
Transcribed Image Text:In 2013 Caterpillar Inc. had about 648 million shares outstanding. Their book value was $27 per share, and the market price was $83.50 per share. The company's balance sheet shows that the company had $25.7 billion of long- term debt, which was currently selling near par value. a. What was Caterpillar's book debt-to-value ratio? b. What was its market debt-to-value ratio?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning